ACCN2 - Accounting Concepts

Question	Answer
Business Entity	Transactions recorded in an organisation’s accounts can only relate to that organisation.
Materiality	All information in the final accounts should be significant to the users of the statements
Cost	Assets should be valued at cost. Objective valuation rather than a matter of opinion
Going Concern	Accountants must assume that the business will continue trading for the foreseeable future
Accurals	Profits should be calculated for a period of time. Revenue must be matched with the expenses incurred in earning that revenue in that period only.
Consistency	Requires a business to apply the same accounting procedures and policies from one financial period to the next.
Prudence	Where there is any doubt, assets and profits should be understated rather than overstated.
Realisation	Revenue should only be recognised when it is certain.
Objectivity	Whenever possible accounting information should be factual rather than an opinion.
Money Measurement Concept	Everything that must be measurable in cash.

Resource summary

	Created by emily-massey almost 10 years ago