1
Q
Define Going Concern
A
- The assumption that a firm will continue to operate within a year time, and has no intention to liquidate
2
Q
Define Prudence
A
- The fact that an accountant should be cautious and not overly optimistic
3
Q
Define Consistency
A
- The fact that information should be produced in the same way with limited errors in order to increase comparability
4
Q
Define Business Entity
A
- The fact that for the sake of accounting, the Business and the owner are two separate and distinct beings
5
Q
Define Dual Aspect
A
- The fact that for every transaction, there will be two equal accounting entries made (DEBK)
6
Q
Define Objectivity
A
- The fact that Financial Statements should be objective, verifiable, bias-free and based on evidence
7
Q
Define Money Measurement
A
- The fact that non-quantifiable resources are excluded from the balance sheet
8
Q
Define Historic Cost
A
- The fact that the value of Assets shown on the SOFP are what you paid for it, not what it could be sold for.
9
Q
Define Matching
A
- The fact that you have to include everything that has helped you generate THIS YEARS sales, so expenses must be current
10
Q
Define Realisation
A
- The fact that Customer requirements are met as per the order/contract, customers formally accept goods and services and Legal claim for payment has been set up.
11
Q
What is the valuation of Inventory tied to?
A
- The LOWER value of the Cost or the Net Realisable Value
