Principles of Accounting Flashcards

1
Q

What are the principles of accounting? (Two main branches)

A

Financial accounting (assets and profits) and managerial accounting (internal records for business performance)

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2
Q

What is meant by consistency?

A

Accounts produced in the same way

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3
Q

What is meant by going concern?

A

Operating as normal

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4
Q

What is meant by matching?

A

Dates used to record financial transactions are when transactions take place not when payment is made

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5
Q

What is meant by materiality?

A

The value of business needs to be a realistic figure not calculating every asset

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6
Q

What is meant by objectivity?

A

Setting realistic prices

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7
Q

What is meant by prudence?

A

Do not overstate values

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8
Q

What is meant by realisation?

A

Things appear when transactions are made not payment made

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9
Q

What is meant by Generally Accepted Accountancy Practice (GAAP) ?

A

Framework for accountancy rules

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10
Q

State 5 factors which influence choice of source

A

Time, legal structure, quantities factors, qualities factors, external influences

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