• thinkigcse.com

Accounting principles and policies

Learning Outcomes

{googleAds} {/googleAds}

At the end of this unit students will be able to

Accounting principles

Show understanding of the following accounting principles:

  • accruals (matching): understand that costs must be matched against related income
  • business entity and ownership: know that a distinction is made between the financial
    transactions of a business and those of its owner(s)
  • consistency: understand that the same accounting treatment should be applied to
    similar items at all times
  • duality: understand the two-fold aspect of every transaction
  • going concern: understand that accounting assumes that a business will continue to
    operate indefinitely
  • money measurement: know that transactions must be expressed in monetary terms
  • prudence: know that profit should not be overstated by ignoring foreseeable losses or that revenue should not be recorded before it is earned
  • realisation: know that revenue is recognised as being earned when legal liability to pay is incurred by the customer (i.e. when ownership of goods passes to the customer).

Accounting policies

recognise the influence of international accounting standards and understand the following
objectives in selecting accounting policies:

  • Comparability: recognise that a financial report can only be compared with reports for other periods if similarities and differences can be identified
  • Relevance: understand that financial information is relevant only if it affects the
    business decisions
  • Reliability: understand that financial information is reliable only if it can be depended
    upon to represent actual events and is free from error and bias
  • Understandability: recognise that a financial report must be capable of being
    understood by the users of that report.

 

 

New Youtube Channel - ThinkIGCSE

Hi Everyone, I have launched a new YouTube channel with more than a 100 videos on  Economics and Business Studies, tailored specifically for IGCSE and A Level and IBDP students.

Subscribe now and join us on this learning journey: @thinkIGCSE

WHO'S ONLINE

We have 264 guests and one member online

Exciting News!

IMPORTANT MESSAGE

Quizzes and worksheets on this website have been developed in Flash format. Flash is no more supported by browsers. Therefore, you might see blank pages on some instances. Install Flash player plugin for Chrome from Chrome Web Store. Click here 

Similarly, for other web browsers you will have to activate the relevant flash player plugins.

Save
Cookies user preferences
We use cookies to ensure you to get the best experience on our website. If you decline the use of cookies, this website may not function as expected.
Accept all
Decline all
Read more
Analytics
Tools used to analyze the data to measure the effectiveness of a website and to understand how it works.
Google Analytics
Our website uses Google Analytics to understand how you interact with our site and improve your browsing experience. These cookies collect information in an anonymous form, including the number of visitors to the site, where visitors have come from, and the pages they visited. The data helps us analyze trends and user behavior to enhance our website's functionality and content.
Accept
Decline
Marketing
Set of techniques which have for object the commercial strategy and in particular the market study.
Marketing
Our website uses Google marketing cookies to deliver personalized ads and measure the effectiveness of our advertising campaigns. These cookies track your online activity to help us show you relevant ads on Google services and partner websites.
Accept
Decline