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ACCOB2 REVIEWER INTRODUCTION TO FINANCIAL ACCOUNTING, CONCEPTUAL FRAMEWORK FOR FINANCIAL REPORTING, CASH AND CASH EQUIVALENTS, RECEIVABLES£12.68
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ACCOB2 REVIEWER INTRODUCTION TO
FINANCIAL ACCOUNTING, CONCEPTUAL
FRAMEWORK FOR FINANCIAL REPORTING,
CASH AND CASH EQUIVALENTS,
RECEIVABLES
Accounting - ANSWER the process of identifying, measuring, and
communicating economic information to permit informed judgment and
decisions by users of information.
Identifying - ANSWER the process of analyzing events and transactions
to determine whether or not they will be recognized. only accountable
events are recognized.
Measuring - ANSWER involves assigning numbers, normally in
monetary forms, to the economic transactions or events.
Communicating - ANSWER the process of transforming economic data
into useful accounting information such as financial statements and
other accounting reports for dissemination to users.
Historical cost - ANSWER most commonly used measurement in
accounting
Basic purpose of Accounting - ANSWER to provide information that are
useful in making economic decisions.
General purpose accounting information - ANSWER designed to meet
the common needs of most statement users. This information is
governed by the Philippine Financial Reporting Standards (PFRS).
Special purpose accounting information - ANSWER designed to meet
the specific needs of particular statement users. This information is
,provided by other types of accounting, e.g., managerial accounting, tax
basis accounting, and etc.
Double-entry system - ANSWER each accountable event is recorded
into two parts, debit and credit.
Going concern - ANSWER the entity is assumed to carry on its operation
for an indefinite period of time.
Separate entity - ANSWER the entity is treated separately from its
owners.
Stable monetary unit - ANSWER amounts in the financial statements are
stated in terms of a common unit of measure; changes in purchasing
power are ignored.
Time period - ANSWER the life of the business is divided into series of
reporting standards.
Materiality concept - ANSWER information is material if its omission or
misstatement could influence economic decisions.
Cost-benefit - ANSWER the cost of processing and communicating
information should not exceed the benefits to be derived from it.
Important to balance cost and benefit that may accrue.
Accrual basis of Accounting - ANSWER effects of transactions are
recognized when they occur (and not as cash is received or paid) and
they are recognized in the accounting periods to which they relate.
Historical cost concept - ANSWER the value of an asset is determined
on the basisi of acquisition cost.
Matching - ANSWER costs are recognized as expenses when the
related revenue is recognized.
Full disclosure principle - ANSWER financial statements provide
sufficient detail to disclose matters that make a difference to users. yet
, sufficient condensation to make the information understandable, keeping
in mind the costs of preparing and using it.
Consistency concept - ANSWER financial statements are prepared on
the basis of accounting policies which are applied consistently from one
period to the next.
Realization - ANSWER the process of converting noncash assets into
cash or claims for cash.
Prudence (conservatism) - ANSWER the inclusion of a degree of caution
in the exercise of the judgments needed in making the estimates
required under conditions of uncertainty, such that assets are not
overstated and liabilities or expenses are not understated.
Financial accounting - ANSWER focuses on general purpose financial
statements
Management accounting - ANSWER focuses on special purpose
financial reports for use by an entity's management.
Cost accounting - ANSWER the systematic recording and analysis of the
costs of the materials, labor, and overhead incident to production.
Auditing - ANSWER the process of evaluating the correspondence of
certain assertions with established criteria and expressing opinion
thereon.
Tax accounting - ANSWER the preparation of tax returns and rendering
of tax advice, such as the determination of tax consequences of certain
proposed business endeavors.
Government accounting - ANSWER refers to the accounting for
government and its instrumentalities, placing emphasis on the custody of
public funds, the purposes for which those funds are committed, and the
responsibility and accountability of the individuals entrusted with those
funds.
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