Measurement process in accounting, Accounting Basics

Assignment Help:

Earlier we defined accounting as the process of measuring, identifying and communicating economic information to permit informed judgments and decisions by the users of the information. In this segment we focus on the measurement procedure of accounting. Accountants measure a business entity's liabilities, assets and stockholders' equity and any changes that occur in them. By assigning the result of these changes to particular time periods (periodicity) they can find the net income or else net loss of the accounting entity for those periods.

Accountants measure the variety of assets of a business in different ways. They measure cash at its specific amount. Explains how they measure claims to cash such like accounts receivable at their expected cash inflows taking into consideration possible uncollectible. They measure prepaid expenses, inventories, plant assets and intangibles at their historical costs (actual amounts paid). After the acquisition date they carry a few items such as inventory at the lower-of-cost-or market value. Subsequent to the acquisition date they carry plant assets and intangibles at original cost less accumulated depreciation or amortization. They calculate liabilities at the amount of cash that will be paid or the value of services that will be performed to satisfy the liabilities.


Related Discussions:- Measurement process in accounting

Briefly explain the term depreciation, Question: Part A: Briefly exp...

Question: Part A: Briefly explain the term "depreciation" and give three reasons why do we need to provide for depreciation on fixed assets during a financial year. Part

Determining entries for January, Received $170,000 cash from Electronic Art...

Received $170,000 cash from Electronic Arts, Inc. for service revenue earned in January.

Depreciation, Depreciation on an Motor Vehicle of 5,000,000

Depreciation on an Motor Vehicle of 5,000,000

Describe the meaning of spin-off?, Spin off is making new company by sellin...

Spin off is making new company by selling or distributing the shares of existing company

The process of adjusting the bond interest expense account, The process of ...

The process of adjusting the bond interest expense account for any premium or discount is called amortization of the premium or discount

Estimate interest rate and analysis market interest, Woodie Limited issues ...

Woodie Limited issues $5 million in convertible bonds on 1 July 2012. They are issued at the fair value and pay an interest rate of 4 percent. The interest is paid at the end of ea

Explain about purchase returns and allowances, Q. Explain about Purchase re...

Q. Explain about Purchase returns and allowances? Purchase returns and allowances A purchase return takes place when a buyer returns merchandise to a seller. When a buyer recei

Journal, Why to and by using in journal, trading a/c, p&l a/c and ledger?

Why to and by using in journal, trading a/c, p&l a/c and ledger?

Show depreciation formula with example, Q. Show depreciation formula with e...

Q. Show depreciation formula with example? The depreciation formula (straight-line) to calculate straight-line depreciation for a one-year period is: Annual deprecation = (

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd