| What is 'Prudence'? | "The exercise of caution when making judgements under conditions of uncertainty." |
| What two things does accounting consist of? | Recording and summarising |
| What statements would the supplier of goods on credit be interested in? | Both the main statements. |
| What is Corporate Governance? | 'The system by which an organisation is directed and controlled, at its most senior levels, in order to achieve its objectives and meet the necessary standards of accountability and probity.' |
| What is used as an international benchmark for countries which create their own financial reporting requirements? | The IFRS Standards. |
| What is Accounting? | The recording of transactions and summarising of information. |
| Increase in Net Assets = | Capital Introduced + Profit - Drawings |
| What is the Conceptual Framework? | A framework created by the IASB to set out the underlying concepts in the preparation and presentation of financial statements. |
| IFRSs are developed within what framework? | The Conceptual Framework. |
| What is an Exposure Draft? | A proposed IFRS published for public comment. |
| What are the main reasons for the accounting standards? | - Reduce Subjectivity
- Gain the ability to compare different organisations |
| What is financial reporting? | Recording, analysing and summarising financial data. |
| What is an asset? | 'A present economic resource controlled by the entity as a result of past events. An economic
resource is a right that has the potential to produce economic benefits.‘ |
| What is a liability? | 'A present obligation of the entity to transfer economic resource as a result of past events.
An obligation is a duty of responsibility that the entity has no practical ability to avoid.‘ |
| What is equity? | “the residual interest in the assets of the entity after deducting all its liabilities.” |
| Sole Traders Profit = | Closing capital + Drawings - Capital introduced - Opening Capital |
| What two things does accounting consist of? | Recording and summarising |
| What is 'Prudence'? | "The exercise of caution when making judgements under conditions of uncertainty." |
| What is an asset? | A present economic resource controlled by an entity as a result of past events. |
| What is a liability? | A present obligation of the entity to transfer an economic resource as a result of past events. |
| What is Equity? | "The residual interest in the assts of the entity after deducting all liabilities. " |
| What is income? | "The increases in assets, or decrease in liabilities that result in increase in equity, other than those relating to contributions from holders of equity claims." |
| What is Expense? | "The decrease in assets or increase in liabilities that results in decrease in equity, other than those relating to distributions to holders of equity claims." |
| What is an economic resource? | "A right that has the potential to produce economic benefits. " |
