Topics: Generally Accepted Accounting Principles, Price, Economics Pages: 3 (344 words) Published: May 11, 2013
Accounting Rules

Principles already Covered: • Business Entity • Duality • Money Measurement • Realisation • Consistency • Matching • Prudence

Sunday, February 24, 2013

Slide No: 1

Accounting Rules

More accounting principles:
• Going Concern (Will continue to operate for an indefinite period of time, no intention to close down or reduce the size of the business). • Materiality (Value of an item to the business or to the decision of stakeholders). • Historical Cost (Recording items based on actual costs). • Accounting Period (Performance measurement, Reporting & Feedback etc.).

Sunday, February 24, 2013

Slide No: 2

Quality of Information

Objectives in selecting accounting policies:
• Relevance: relevant to the (intended) users of the financial statements/reports. • Timely: Should be in time.

• Reliability: True and fair representation, free from bias & significant errors. • Comparability: Same policies, or information on effect and implication of changes of policies or the effects and implications of different policies. • Understandability: Clarity of information, consider the ability of the users to understand in choosing terms etc.

Sunday, February 24, 2013

Slide No: 3

Capital and Revenue (Short term/Long Term) Expenditure & Receipt • Capital Expenditure: Money spent on purchasing, improving or extending fixed assets. T. Cost = Purchase Cost + (Legal + Carriage + Installation)Costs. • Revenue Expenditure: Money spent on running the business on day-to-day basis. Includes admin’n expenses, financial expenses, selling & distribution expenses, discounts given or cost of maintaining the fixed assets etc.

• Capital Receipt: On the disposal of a fixed asset. • Revenue Receipt: Sales, other income ( Rent received, commission received, discount received etc.)

Sunday, February 24, 2013

Slide No: 4...
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