Chapter Accounting
1. information system & financial stateme
Accounting Cycle: processfinancial
into
used to draws for
Statements
results of business activity
Conceptual Framework
Accounting standards rest on a
conceptual framework.
-
halps explain why
accountants adopt curtain
practices.
Quelitative Characteristics &
·
I fundamental characteristics useful information should process
-> Reluence: if it is
capable of making a difference in a business
decision by future
predict events
(predictive velel or
valu
providing
f
#
the
feedback about prior expectations
omission or misstatement of information could
(confirmatory
influence decision,then information material =
(materiality
- Faithful Representation:
should be complete (include all
necessary
information, neutral (unbiased), free from
error (as accurate as
possible)
,Enhancing Characteri s ti c s
①
Comparability +
Consistency
and differences between 2
identify items
similarities
→ or
more .
→ use if compared to similar information about
other cold data)
companies
(benchmarking
or same
company
@
Verifiability
→ verifiable when
independent parties can
reach
general consensus .
③ Timeliness
Information doesn't lose to Influence
→
before
ability
business decision
reaching
users
⑧
Understandabilitywith
→ user
accounting knowledge can
comprehend
of information effort
meaning with resoneble .
characteristics should be maximised their
Enhancing
extent .
to
possibl
Qualitative Characteristic bound 2 constraints
by
:
→ Cost constraint : benefit received from account: def should
be cost of
greater man
producing data
→ Pretence constraint : extra care to mete sure assets & revenue
Cconsetratism not overstated liabilities and cost not understate
,
, _
:
Assumptions
Separate entity Asumptiou (company is separate from ]
-
owners
continuity C company operates long enough to carry out existing commitmen
'
Periodicity assumption [ quarterly , monthly , yes
•
Unit of measure :S national
monetary unit)
-
Principals
General to and record business
approach measure
activity
.
.
of
Historical cost
activity
business be
initially measured
① :
at their cost
, exchange rate at de time .
② Revenue
Recognition determine where revenue is recorded
:
③ Full Disclosure i financial statement include all information
.
.
1. information system & financial stateme
Accounting Cycle: processfinancial
into
used to draws for
Statements
results of business activity
Conceptual Framework
Accounting standards rest on a
conceptual framework.
-
halps explain why
accountants adopt curtain
practices.
Quelitative Characteristics &
·
I fundamental characteristics useful information should process
-> Reluence: if it is
capable of making a difference in a business
decision by future
predict events
(predictive velel or
valu
providing
f
#
the
feedback about prior expectations
omission or misstatement of information could
(confirmatory
influence decision,then information material =
(materiality
- Faithful Representation:
should be complete (include all
necessary
information, neutral (unbiased), free from
error (as accurate as
possible)
,Enhancing Characteri s ti c s
①
Comparability +
Consistency
and differences between 2
identify items
similarities
→ or
more .
→ use if compared to similar information about
other cold data)
companies
(benchmarking
or same
company
@
Verifiability
→ verifiable when
independent parties can
reach
general consensus .
③ Timeliness
Information doesn't lose to Influence
→
before
ability
business decision
reaching
users
⑧
Understandabilitywith
→ user
accounting knowledge can
comprehend
of information effort
meaning with resoneble .
characteristics should be maximised their
Enhancing
extent .
to
possibl
Qualitative Characteristic bound 2 constraints
by
:
→ Cost constraint : benefit received from account: def should
be cost of
greater man
producing data
→ Pretence constraint : extra care to mete sure assets & revenue
Cconsetratism not overstated liabilities and cost not understate
,
, _
:
Assumptions
Separate entity Asumptiou (company is separate from ]
-
owners
continuity C company operates long enough to carry out existing commitmen
'
Periodicity assumption [ quarterly , monthly , yes
•
Unit of measure :S national
monetary unit)
-
Principals
General to and record business
approach measure
activity
.
.
of
Historical cost
activity
business be
initially measured
① :
at their cost
, exchange rate at de time .
② Revenue
Recognition determine where revenue is recorded
:
③ Full Disclosure i financial statement include all information
.
.
