This is the module for you if you want a route into the accountancy profession or need to gain fundamental accounting skills for a management or other role. Principle of Continuity: This principle follows along the lines of the going concern concept of accounting and according to it, all financial statements should be drafted assuming the perpetual existence and uninterrupted functioning of the business entity. Principle of Disclosure: According to this principle, the true and fair financial position of an organization must be reflected in its financial records and statements.
For instance, any prepayment or pre-receipts for subsequent accounting periods must be allocated accordingly to those accounting periods rather than recording the entire amount as the expense or revenue for the current accounting period. Generally, now that we are already in the 2nd millennium, journalizing is done electronically thru computers either by excel or an accounting software.
As per this principle, an organization must reveal to its client or customer such financial information the communication or omission thereof may have a significant bearing upon the client’s decision to do business with the firm. Is an accounting tool to show the debit and credit for a better understanding of the effect of double- entry. Error of Omission ─ this occurs when a transaction is completely left out or omitted from the accounting entries. Compensating Errors – These occur where two or more accounting errors cancel out their effect on the trial balance.
Complete Reversal of Entries – When accounting entries are mistakenly reversed the entries are still debited to one account and credited to another. If a baker’s product is a stunning desert, and a painter’s masterpiece is a fabulous painting, accountants have a reliable and relevant Financial Statements as the end-product. Answer: Temporary or nominal accounts, i.e. income statement accounts, are closed to prepare them for the next accounting period.
Financial planning which allows you to plan your retirement, purchases, taxes, lifetime events, home purchases, debt relief and other financial goals. The new program comes with the ability to see all of your financial information on the main page. Using personal financial software will assist you in managing your finances conveniently and stress free. Personal financial software is easy to use and once you get used to it you will probably wonder how you managed without it before. I haven’t taken time to figure out any of the financial software, but it is on my list of things to do-soon. The financial reports would clearly show if the agencies are achieving what is mandated by them.