Accounting policies-financial statement, Financial Accounting

Accounting policies

Accounting policies are the specific assumptions, bases, principles and practices that are adopted by firms in preparing financial statements. The standard requires that companies follow the policies consistently from one financial period to the next.

A company should be guided by accounting standards or the current practices in choosing and applying accounting policies. The standard allows firms to change their accounting policies when;

  • There is new standard
  • The change is required by the law
  • The new change will result in a fair presentation of the financial performance and position.

 

When a company changes its policies, then the change should be accounted for respectively i.e. the previously reported financial statements should be adjusted/restated to reflect the new policy for comparison purposes.

Posted Date: 12/12/2012 12:49:17 AM | Location : United States







Related Discussions:- Accounting policies-financial statement, Assignment Help, Ask Question on Accounting policies-financial statement, Get Answer, Expert's Help, Accounting policies-financial statement Discussions

Write discussion on Accounting policies-financial statement
Your posts are moderated
Related Questions
Sundry Matters 1) The accounting system is also appropriate for departmental accounts. 2) The branch stock account is a practical means of controlling stock at the branch.

a company recorded for the past year a sales of 500,000 and an operating incme of 40,000. What is the turnover needed to earn in order to achieve an ROI of 20%

Unqualified Opinion - AUDIT opinion not qualified for any material scope restrictions nor departures from GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP). AUDITOR may issue an unqu

Determine about the accounting information Numerous user groups have an interest in accounting information relating to a business. Majority of these are outside the business ho

An annuity is explained as stream of uniform duration cash flows. The payment of life insurance premium through the policyholder to the insurance company is an illustration of an a

(a) You are working as the CFO of Jeans Co. The company is currently seeking a new supplier for their goods. There are two main suppliers of choice, XYZ Ltd and ABC Ltd. The contra

Ely purchased a patent (with a remaining legal life of ten years) from Backo on January 1, 2010 for $300,000. Ely expected to use the patent for five years. The carrying value on B

Provisions of the Partnership Act In the event of absence of a partnership agreement/deed or in the event of ambiguity therein, the provisions to the partnership Act will apply

Motivation is said to be an internal state that energises an individual to engage in certain types of behaviours. This process is triggered when the individual experiences certain

Dangers of over-reliance on trade credit In effect for the reason that trade credit represents temporary borrowing from suppliers until invoices are paid it becomes an importan