COMMERCE 1AA3 Study Guide - Final Guide: The Ledger, Letter Case, General Ledger
12 Dec 2016
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Fundamental qualitative characteristics: relevance information provided is useful (provide predictive/confirmatory values that are material in nature, faithful representation accounting records should be based on accurate data, free of bias. Enhancing qualitative characteristics: comparability, verifiability, timeliness, understandability. Assumptions: unit of measurement, separate entity, periodicity (time period) financial reporting must be periodical in order for the accounting information to be relevant, going concern. Principles: historical cost assets should be recorded at purchase price, full disclosure, revenue recognition . The earnings process is complete or nearly complete. Collection is reasonably assured: matching resources consumed to earn revenues in an accounting period should be recorded in that period, regardless of when cash is paid. Share capital, retained earnings, dividends, revenues, expenses, gains the transactions. future. earnings. earnings. and losses are all shareholders" equity accounts. Another similar term is (cid:498)owners" equity. (cid:499: revenues income earned from performing services or selling products.
