Summary
Summary Accounting (ACCT212)
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the document explains the basics to accounting by starting with the conceptual framework. then move to broader questions like the revenue as well as IAS-8
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ACCOUNTINGNOTES
ACCOUNTING 102
CONCEPTUAL FRAMEWORK
, CONCEPTUAL FRAMEWORK ACC0UNTING 102
CHAPTER 4
There are 3 types of statements (reports included in the
annual financial statements)
Statement of cash flow – to see how much cash has flowed in
and out of the business.
Statement of financial position – to see financial position of
the business, what assets are controlled, liabilities are owed
and equity is held by the owners of the business.
Statement of profit or loss and other comprehensive income –
to see how the business has performed and how profitable the
business has been during the year.
GENERALLY ACCEPTED ACCOUNTING PRACTISE (GAAP)
This provides the underlying principles applied when preparing
financial reports, as well as additional standards that indicate how
the principles are applied in specific situations.
The reports must achieve “fair representation”, this means that
they must accurately convey what the company has achieved.
Financial reports should be prepared in terms of principles that
are widely understood and consistently applied.
Conceptual framework for financial reporting – describes the
objectives of general-purpose financial reporting and the concept
that underlie the preparation and presentation of financial
reports.
Conceptual framework is issued by the “international accounting
standard board (IASB) ” it is used to assist (IASB) to develop
standards that are based on consistent principles. Also used to
decide how to treat transactions when no specific standards
apply.
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