Accounting Prudence Concept - 1972 Words

conservation Prudence concept: revenue and profits are included in the balance sheet only when they are realized(or there is reasonable certainty of realizing them) butliabilities are included when there is a reasonable possibility of incurring them. Also called conservation concept. Du Pont analysis A type of analysis that examines a company s Return on Equity (ROE) by breaking it into three main components:profit margin, asset turnover and leverage factor. By breaking the ROE into distinct parts, investors can examine how effectively a company is using equity, since poorly performing components will drag down the overall figure. To calculate a firm s ROE through Du Pont analysis, multiply theprofit margin (net income†¦show more content†¦These costs are recorded in ledger accounts throughout the year and are then shown in the final trial balance before the preparing of the manufacturing statement accounting concept and conventions In drawing up accounting statements, whether they are external financial accounts or internally-focused management accounts, a clear objective has to be that the accounts fairly reflect the true substance of the business and the results of its operation. The theory of accounting has, therefore, developed the concept of a true and fair view. The true and fair view is applied in ensuring and assessing whether accounts do indeed portray accurately the business activities. To support the application of the true and fair view, accounting has adopted certain concepts and conventions which help to ensure that accounting information is presented accurately and consistently. Accounting Conventions The most commonly encountered convention is the historical cost convention. This requires transactions to be recorded at the price ruling at the time, and for assets to be valued at their original cost. Under the historical cost convention, therefore, no account is taken of changing prices in the economy. The other conventions you will encounter in a set of accounts can be summarized as follows: Monetary measurement | Accountants do not account for items unless they can beShow MoreRelatedAccrual, Prudence And Matching Concepts Of Accounting1085 Words   |  5 Pagessubject to the accrual, prudence and matching concepts of accounting. The accrual concept of accounting postulates that revenue income should be recognized when it is earned. Therefore, the fact that the cash settlement of the transaction in the case of MPI and CWR occurred later is immaterial. For instance, the sales agreement between the two parties pertaining to the mixer segment of the assembly line system was made on 14th September, 2014. According to the accrual concept, the revenue should beRead MoreThe Modern Business Environment1482 Words   |  6 PagesToday, Accounting is called â€Å"the language of business† because it is the source where all financial information comes from. However, Accounting is bas ed on certain rules which all accountants must adhere. These rules are based on the Accounting standards and Accounting concepts. They form the framework and are the guidelines for good accounting practices. However, at times the accounting concepts may clash with each other due to conflicting objectives. The problem lies in the accounting conventionsRead MoreImportance Of Iasb Conceptual Framework981 Words   |  4 PagesEssay Accounting The conceptual framework for accounting is a report of rules which demonstrate commonly established guidance for the evolvement of new reporting practices and for improvement of the already existing ones. The most recognisable and frequently used conceptual framework is invented in 1989 by the International Accounting Standards Board (IASB). (Financial accounting, p7 Pearson). The Conceptual Framework also discusses the question about the importance of characteristic of handfulRead MoreThe International Accounting Standards Board1341 Words   |  6 Pagesis a framework developed by the International Accounting Standards Board (IASB). In a nutshell, what this framework does is to lay out the concepts needed for accurate preparation and presentation of financial statements to external users such as auditors, tax authorities, investors, regulatory authorities and so on. According to the IASB, the Conceptual Framework for Financial Reporting does the following; â€Å"†¦describes the objective of, and the concepts for, general purpose financial reporting. ItRead MoreThe Role Of Financial Reporting On The International Accounting Standards Board1533 Words   |  7 Pagesby the International Accounting Standards Board (IASB) aims to set out the fundamental concepts in the preparation and presentation of financial statements (IFRS 2014). This essay will attempt to analyse the specific concept of prudence found in the qualitative characteristics chapter of the conceptual framework. Prudence has been omitted from the conceptual framework in recent years, and this essay will attempt to establish whether it is needed or not. The concept of prudence, in terms of financialRead MoreThe Relationship Between Ias 37 And Principle Of Accounting Prudence1188 Words   |  5 Pagesthe accounting for provisions, contingent liabilities and contingent assets. The use of this standard is inseparable from the principle of accounting prudence, however, some comments indicated that IAS 37 has undermined this principle and resulting in considerable volatility in the earning reports. This essay aims to explore the standard and discuss the relationship between IAS 37 and principle of accounting prudence and show my opinion of the comments above. Main Body The prudence concept, alsoRead MoreIasb Conceptual Framework And The Relevence Of Prudence1504 Words   |  7 PagesRELEVENCE OF PRUDENCE STUDENT ID: 51552932 Introduction The purpose of this essay seeks address what the International Accounting Standards Board (IASB) conceptual framework is all about as well as explores the issues for and against the inclusion of the prudence into the framework. Although, the prudence concept was expunged from the IASB conceptual framework in 2010 due to agreements on accounting principles convergence with the US standards operating body, Financial Accounting Standards BoardRead MoreFinancial Statements We See Nowadays Have Gone Through1506 Words   |  7 Pagesliabilities and contingent assets in accounts. Although, the IAS 37 may lead to a high volatility in retained earnings which resulted in the increasing in the usage of creative accounting unless the standard follows the prudence concept. Hence, in this essay, there will be discussions on the relationship between IAS 37 and prudence concept as well as the increasing in volatility in earnings that might lead by the IAS 37. Generally, IAS 37 is a standard that concern on how to recognize provisions inRead MoreThe Accruals And Going Concern Concepts1443 Words   |  6 Pagesï » ¿The accruals and going concern concepts are regarded as fundamental in the preparation of financial statements. Discuss the advantages and disadvantages of these concepts, explaining the reasons why these concepts may be difficult to apply or may be inconsistent with other concepts. Accounting statement and records are a periodic summary of account activity within a period and the documentations involved in the preparation of it (Thomas and Ward, 2012: 4). They are done based on a set of rulesRead MoreThe Main Components Of Financial Statements And The Processes Used By A Large Company1488 Words   |  6 Pagesmanner. They provide business stakeholders both inside and outside a clear picture of the current financial standing of the business enterprise. Preparing these financial statements in not an easy task and requires professional judgement so prudence is a key accounting principle which makes sure that assets and income are not overstated and liabilities and expenses are not understated. Most businesses produce three major financial statements, including the income statement, balance sheet and cash flow

Physics Of A Physics Experiment - 930 Words

Experiment is the way that be used by people to either practice or prove a physics theorem. It should be rigorous and carefully designed even if the experiment is dealing with a shallow thing. As simple as the experiment of detecting Friction Force between an object and surface, the experiment still has to follow several stages in order to make the conclusion accurate. First of all, every physical exam will begin with a hypothesis. We must figure out what we are going to test about during this experiment before we start everything else, so we roughly take a guess about the experiment topic and the guess will be the Hypothesis. Hypothesis is the provisional conjecture to guide the whole investigation. By putting forward the hypothesis, we can give our experiment a proposition and a general direction. At the age of most physics rule haven’t been discovered, scientists starts their experiment by just having a hypothesis. If the experiment is correct and the result supports their hypothesis, the hypothesis becomes a rule. If the result does not support the hypothesis, the scientists would gain a known wrong hypothesis and then he can set a new hypothesis and start a new experiment. It is the way our science could be moving forward little by little. In the experiment of detecting Frictional Force between an object and a surface, the hypothesis will be that : Friction Force is the force prevents the relative motion happens and exists at the place that an object attachesShow MoreRelatedThe Physics Of An Experiment1509 Words   |  7 Pagesin the EPR paper and later more eloquently describe by David Bohm. In the paper by Bohm, he shows how one could conceive of an experiment to mirror the conceptual situation put forth in the EPR paper, by examining the dissociation of a diatomic molecule whose total spin angular momentum is zero. For example, the hydrogen molecule into two hydrogen atoms. In the experiment, the hydrogen atoms would separate after interaction, in different free directions. It is here that an experimenter would measureRead MorePhysics Experiment5459 Words   |  22 PagesEXPERIMENT NO-1 AIM- To determine the frequency of A. C. mains by using an electric vibrator. APPARATUS- Electric vibrator, table lamp, pulley, weight box, fishing cord, a. c. source. THEORY- when a cord of mass per unit length m is connected to the vibrating rod of the vibrator and stretched with a tension T, the cord vibrators in segments. If the length of the cord is then adjusted until the nodes are clearly marked, the frequency of the stretched string is the same as of the vibrating rod whichRead MorePhysics : Mechanical Physics Of Heat Experiment808 Words   |  4 PagesEquivalent of Heat Experiment Hypothesis: To verify the relationship between mechanical energy and heat; that is, to find the relationship between energy associated with motion and the energy transfer between objects at different temperatures. Equipment: capped cardboard Aluminum shot Thermometer Ice bath Metal cup Procedure: †¢ Measure out a small beaker of aluminum shots. (The shots should be chilled some before the experiment starts to helpRead MoreLab Experiment : Physics Chemistry1031 Words   |  5 Pages Chemistry Honors Lab 1: Measurements Theory The overall objective of this lab experiment is to learn about measurements. Most to all experiments and labs require some form of measurements. Because there are many various kinds of measurements, it is important to be aware of the different factors of each measurement involved with the current lab experiment. It is also important to have a general understanding of them because they will need to be used in calculationsRead MorePhysics Of Quantum Mechanical Experiments1337 Words   |  6 PagesWe’ve already discussed some of the experimental phenomena that inspire competing interpretations or theories of what’s going on in the real world during quantum-mechanical experiments. (In brief: Observing microscopic particles seems to either: cause them to randomly take one result or the other; create a branching world for every possible outcome; or require hidden variables and allow for faster-than-light, nonlocal communication. Particles seem not to take one path, not t he other, not both, andRead MorePhysics : Science And Volcano Experiment1127 Words   |  5 Pages1. Topic; science/volcano experiment a. Teams will be investigating a volcano of their choosing, creating a model of the volcano, and writing a one page report on their findings. The team will come together to write a 1-2 page report and create a volcanic model based on the information they’ve gathered. The roles and responsibilities that students will have include the following: (1). Teammate 1 will be a researcher and Praiser. He/she will verbally express appreciation for teammates’ ideas andRead MorePhysics Of Hot Air Balloon Experiment1808 Words   |  8 PagesPhysics The following report explains the results of a model hot air balloon experiment that replicates a previous incident in which the temperature in the envelope was heated to a point until it was burned. After assessing the researched and calculated data, the assertion of the â€Å"air in the balloon becoming too hot† to lift the mass will be validated. The physics related to the operation of hot air balloons is essentially the use of hot air to create a buoyant force and generate lift. A hot airRead MorePhysics Experiment On Diodes And Bridge Rectifiers Essay1239 Words   |  5 PagesEngineering Laboratory Experiment Report #2,3, 4 Experiment # 2 - Semiconductor Diodes Experiment # 3 - Diodes and Bridge Rectifiers Experiment # 4 – Zener Diode Voltage Regulator; Diode Clippers and Clampers Author: Joshua Lewis Date: October 18th, 2016 This report was submitted in compliance with UNCC POLICY 407 THE CODE OF STUDENT ACADEMIC INTEGRITY, Revised November 6, 2014 (http://legal.uncc.edu/policies/up-407) ___JL____. (Student’s Initials) Experiment #2 Semiconductor DiodesRead MorePhysics Lab Experiment On Beam Deflection1764 Words   |  8 Pages AM 317 MECHANICS LAB EXPERIMENT 1 BEAM DEFLECTIONS TEST PERFORMED: JUNE 10, 2016 REPORT SUBMITTED: JUNE 17, 2016 BY BRADLEY ACKART NOUR ALI HAMAD ALMUHANNA SARA SCHAAB GROUP 1 ABSTRACT Beam deflection is an important aspect in everyday life. From skyscrapers to supermarkets, beams are all around us. Knowing how these beams will react under certain weight and conditions will determine exactly what type of material they should be made of as well as what their dimensions shouldRead MorePhysics Experiment : Spectroscopy, Hydrogen, Mercury, Other Gases And Light Sources Using Spectroscopy1037 Words   |  5 PagesExperiment#1: SPECTROSCOPY Introduction: (a)The purpose of the experiment: To observe the emission spectra of hydrogen, mercury, other gases and light sources using spectroscopy. (b)The theoretical background: Classical physics theories could not explain why the bright lines at discrete wavelengths appeared, but with the advent of Bohr’s model of atom, it was now possible to explain this phenomenon, which also used the key concepts of classical physics. Bohr’s theory states that an electron can

Discovering Myself free essay sample

As the students’ sneakers scuff against the gymnasium floor, my heart thumps as a candidate on my right hums annoyingly to herself. Senate election speeches. Clusters of friends embrace with hugs and waves. At this moment, I wish for my friends to spoon feed me words of encouragement. I can do this. I am ready. The current president rocks back and forth on the soles of his shoes, behind the podium, as he waits for students to find seats. Sweat droplets stream from my forehead as I swipe them away quickly with my wrist. The president speaks, saying â€Å"Good morning†. Introductions begin and my turn arrives. I rise from my seat, fingers and knee caps shaking. The paper finds its position on the podium and I raise my head, scanning the crowd. A breath inhales in my lungs and words escape from my mouth. â€Å"Good morning classmates,† I say to their day dreaming eyes. We will write a custom essay sample on Discovering Myself or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page I keep myself entertaining and smile mid-sentences. Time seems to slow, yet the fear keeps me driven. I hear the applause of my classmates, knowing I have succeeded. Days pass and the website reveals the familiar words: â€Å"Polls still being counted.† But then, the positions are released to the student body. That day, I slam the backdoor of my house open without regrets and turn the corner up the stairs with my car keys in my mouth. I frantically boot the oh so slow laptop on my desk and type the address of the website. I scroll down to secretary and see â€Å"Kailey Recknagel.† I sit and wait for the tears to come streaming down my face, but instead, laughter comes over me. Loss isn’t what it’s made out to be. Though people may look at themselves as failures, the list of options is longer than they might think. Having an intense competition is better than being afraid to enter the contest. Being graceful in defeat is better than never learning to be gr acious. I found that I was glad for my friend and not unhappy with myself.