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Accounting Igcse Cie

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  1. The-Purpose-Of-Accounting Igcse Cie
    3 主题
  2. Business-Documents Igcse Cie
    3 主题
  3. Books-Of-Prime-Entry Igcse Cie
    2 主题
  4. Double-Entry-Book-Keeping-With-Ledger-Accounts Igcse Cie
    8 主题
  5. The-Cash-And-Petty-Cash-Books Igcse Cie
    2 主题
  6. The-Trial-Balance-And-Correction-Of-Errors Igcse Cie
    4 主题
  7. Bank-Reconciliation Igcse Cie
    2 主题
  8. Control-Accounts Igcse Cie
    3 主题
  9. Capital-And-Revenue-Expenditure-And-Receipts Igcse Cie
    2 主题
  10. Depreciation-And-Disposal-Of-Non-Current-Assets Igcse Cie
    3 主题
  11. Other-Payables-And-Other-Receivables Igcse Cie
    2 主题
  12. Irrecoverable-Debts-And-Provision-For-Doubtful-Debts Igcse Cie
    2 主题
  13. Valuation-Of-Inventory Igcse Cie
    2 主题
  14. Financial-Statements-For-Sole-Traders Igcse Cie
    8 主题
  15. Financial-Statements-For-Partnerships Igcse Cie
    5 主题
  16. Financial-Statements-For-Limited-Companies Igcse Cie
    4 主题
  17. Financial-Statements-For-Clubs-And-Societies Igcse Cie
    5 主题
  18. Financial-Statements-For-Manufacturing-Businesses Igcse Cie
    3 主题
  19. Incomplete-Records Igcse Cie
    4 主题
  20. Accounting-Ratios Igcse Cie
    6 主题
  21. Accounting-Principles-And-Policies Igcse Cie
    2 主题
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Exam code:0452 & 0985

Accounting policies

What are international accounting standards?

  • The international accounting standards are set by the International Accounting Standards Board

    • These detail the standards for the financial statements

  • The main purpose of following the international accounting standards is for:

    • Comparability

    • Relevance

    • Reliability

    • Understandability

Policy

Description

Comparability

  • The information for one financial period should be presented in a way such that it can used for comparisons

  • The information should be able to be compared with information from a previous period

  • The information should be able to be compared with information from a different business

Relevance

  • The accounting information should be provided in a timely manner so that it is relevant to the users

  • Financial decisions affecting the future of the business should be able to be made from the information

Reliability

  • The users of the data provided by the financial statements should be able to rely on the information provided

  • The information should be objective and free from bias, opinions and significant errors

  • The information should be capable of being independently verified

Understandability

  • The accounting information provided should be clear so that users can easily understand it

  • It can be assumed that the users have a reasonable understanding of accounting terms

Examiner Tips and Tricks

It is common for the last question on Paper 1 to give you a statement and ask you to select the related policy. Alternatively, you could be given a policy and asked to select a statement related to it.

Worked Example

The accountant for a business applied the accounting policy of relevance when they prepared the financial statements at the end of a financial period.

Which of the following is a direct effect of the relevance policy?

A

Interested parties make decisions using the financial statements.

B

Interested parties can easily understand the financial statements.

C

The financial statements can be independently verified.

D

Comparisons can be made with the previous financial statements of the business.

Answer

A

This is the correct answer

B

This is understandability

C

This is reliability

D

This is comparability

Responses

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