Accounting concepts
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7 Terms
Accounting entity
The financial affairs of the business are kept separate and distinct from the financial affairs of the owner or other entities.
There are 2 applications
Monetary
All transactions must be recorded in NZ dollars.
There are 2 applications.
Going Concern
It is assumed that the business will continue its present operation into the foreseeable future.
One application.
Period reporting
The economic activity of the business can be divided into periods of equal length.
One application.
Historical Cost
All transactions are recorded at their original purchase price.
One application
Accrual Basis
The effects pf transactions are recognized when they occur and reported in the financial reports of the periods to which they relate.
One application
Assets