Measuring and reporting financial position
3 important questions on Measuring and reporting financial position
What is a 'Non-current asset'?
It are assets you can use multiple times: e.g.
-land
-buildings
-equipment
-trucks and cars
Which Liability does shareholders prefer?
Current is less expensive but puts a lot of pressure on cash
flow.
When your equity goes up in the business, your assets in the
private account goes up.
What are 'accounting conventions'?
-Accounting conventions are the rules of accounting that have
evolved to deal with practical problems experienced by those
preparing financial statements.
- The main conventions relating to the stement of financial
position include business entity, gastric costs, prudence, going
concern and dual aspect.
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