Advance Financial Accounting Assignment
Answer to Assignment 1
1. “internal consistency” of accounting standards is Any entity intends to create its own standard must in accordance with the existing system of standard
2. In order to achieve “internal consistency”, the necessary factors are as follow:
a) Any entity intends to create its own standard must in accordance with the existing system of standard
b) Developing standards are correspondence with the same conceptual framework. It is necessary to establish an accounting law or principle to regulate these economic actions more specific, similar issues are treated identified, different issues are treated distinguished. two separate enterprises can account the financial report in the same way relate to one course of action in economy.
c) There is only one accounting method to be used for reference, to be treated as a guidance relate to the relevant or comparable accounting issues and then can be put into the system, providing reliable information.
3. Consistency in application is the same accounting policies and procedures are applied among entities in a period or applied continuously in an entity, rules of specific recognition and measurement requirements also provided. 4. In order to achieve “consistency in application”, the necessary factors are as follow: a) Accounting standards should internally consistent b) Make sure management’s judgements at the basis of the existence of specific guidance , all the concepts and principles relates to comparable issues are commanded by the rule maker and the managers are involved in the specific guidance applies accounting issues. c) Principle can hardly affected by other purposes, hence, providing more relevant information to managers, which makes principle based system more likely to be consistent. d) Choose accounting policies from long time’s trial
References
1. Wüstemann J., and Wüstemann, S., (2010) ‘Why Consistency of
1. “internal consistency” of accounting standards is Any entity intends to create its own standard must in accordance with the existing system of standard
2. In order to achieve “internal consistency”, the necessary factors are as follow:
a) Any entity intends to create its own standard must in accordance with the existing system of standard
b) Developing standards are correspondence with the same conceptual framework. It is necessary to establish an accounting law or principle to regulate these economic actions more specific, similar issues are treated identified, different issues are treated distinguished. two separate enterprises can account the financial report in the same way relate to one course of action in economy.
c) There is only one accounting method to be used for reference, to be treated as a guidance relate to the relevant or comparable accounting issues and then can be put into the system, providing reliable information.
3. Consistency in application is the same accounting policies and procedures are applied among entities in a period or applied continuously in an entity, rules of specific recognition and measurement requirements also provided. 4. In order to achieve “consistency in application”, the necessary factors are as follow: a) Accounting standards should internally consistent b) Make sure management’s judgements at the basis of the existence of specific guidance , all the concepts and principles relates to comparable issues are commanded by the rule maker and the managers are involved in the specific guidance applies accounting issues. c) Principle can hardly affected by other purposes, hence, providing more relevant information to managers, which makes principle based system more likely to be consistent. d) Choose accounting policies from long time’s trial
References
1. Wüstemann J., and Wüstemann, S., (2010) ‘Why Consistency of
References: 1. Wüstemann J., and Wüstemann, S., (2010) ‘Why Consistency of Accounting Standards Matters: A Contribution to the Rules-Versus-Principles Debate in Financial Reporting’, Abacus, Vol. 46, No. 1, pp 1-27