Post on 04-Apr-2018
transcript
7/31/2019 Basic Accounting Concept
1/13
BASIC ACCOUNTING
CONCEPTPresented by:
Ady Setyo Putro
Nugraha W
Ribka Armanda
STIESIA SURABAYA
2012
7/31/2019 Basic Accounting Concept
2/13
According to Statement of the Accounting
Principles Board No. 4, p. 8 Accounting is aservice activity. Its function is to provide
quantitative information, primarily financial innature, about economic entities that is intended to
be useful in making economic decisionsinmaking reasoned choices among alternative
courses of action.
7/31/2019 Basic Accounting Concept
3/13
1. Identification
2. Recording
3. Communication
7/31/2019 Basic Accounting Concept
4/13
1. Assumptions
2. Principle3. Constraints/Limitation
7/31/2019 Basic Accounting Concept
5/13
PURPOSE OFFINANCIAL REPORT ASUMPTIONS
ACCOUNTINGSTANDARD
PRICIPLE, METHODE,
PROCEDURE
FINANCIAL REPORT RELATIONSHIP
7/31/2019 Basic Accounting Concept
6/13
Separate/Economic Entity: a corporation isconsidered a living fictional being
Going Concern: corporation is assumed toremain in existence for an indefinitely long time
Measurement and Unit of Measure :Financial Statement only show economically
measureable activity of a company Periodicity: A company continuous life can be
divided into measured period of time
7/31/2019 Basic Accounting Concept
7/13
Historical Cost : Financial Statementreport companies resources andobligation at an initial historical cost orusuallymean the original cost at thetime of a transaction
1
7/31/2019 Basic Accounting Concept
8/13
Principle 2:Revenue Recognition. Accrual basis of accounting dictates that revenues
must be recorded when earned and measurable.
Principle 3:Matching Principle. Under the matching principle, costs associated with
making a product must be recorded (matched to)
the revenue generated from that product during thesame period.
Costs of a product must be recorded during the periodas revenue from selling it
7/31/2019 Basic Accounting Concept
9/13
4. Full DisclosureCompany must reveal all the relevant economicinformation determined to make the difference totheir user
Such disclosure should be accomplished in thefollowing sections of companies reports:
Financial statements Notes to financial statements
Supplementary information
7/31/2019 Basic Accounting Concept
10/13
5. Consistency
For each company, the preparation offinancial statements must utilize measurementtechniques and assumptions that are consistentfrom one period to another.
7/31/2019 Basic Accounting Concept
11/13
Estimates & Judgments
Certain measurements cannot be performed completelyaccurately, and must therefore utilize conservativeestimates and judgments
Materiality
Inclusion and disclosure of financial transactions in
financial statements hinge on their size and effect onthe company performing them.
7/31/2019 Basic Accounting Concept
12/13
Conservatism
Conservative is the stance taken by the accountant in theface of two or more alternatives in the preparation of
financial statements. If there was more than onealternative, the accountant should choose the termthat will not make overstated assets and revenue.
7/31/2019 Basic Accounting Concept
13/13
THANK YOU