Scribd Logo
Upload

Welcome to Scribd!

  • 219 views

    Accounting Concepts and Inventory Valuation

    Uploaded by

    amybywater
    This document introduces accounting concepts and inventory valuation. It discusses key accounting concepts such as the historical cost concept, money measurement concept, and business entity concept. It also covers the fundamental accounting concepts of going concern, consistency, prudence, realization, and accruals. For inventory valuation, the document explains that inventory should be valued at the lower of cost or net realizable value according to IAS 2. The overall aims are to introduce these accounting concepts and inventory valuation rules.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd

    Accounting Concepts and Inventory Valuation

    Uploaded by

    amybywater
    219 views12 pages
    This document introduces accounting concepts and inventory valuation. It discusses key accounting concepts such as the historical cost concept, money measurement concept, and business entity concept. It also covers the fundamental accounting concepts of going concern, consistency, prudence, realization, and accruals. For inventory valuation, the document explains that inventory should be valued at the lower of cost or net realizable value according to IAS 2. The overall aims are to introduce these accounting concepts and inventory valuation rules.

    Original Description:

    Accounting Concepts and Inventory Valuation

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PPT, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document introduces accounting concepts and inventory valuation. It discusses key accounting concepts such as the historical cost concept, money measurement concept, and business entity concept. It also covers the fundamental accounting concepts of going concern, consistency, prudence, realization, and accruals. For inventory valuation, the document explains that inventory should be valued at the lower of cost or net realizable value according to IAS 2. The overall aims are to introduce these accounting concepts and inventory valuation rules.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    219 views12 pages

    Accounting Concepts and Inventory Valuation

    Uploaded by

    amybywater
    This document introduces accounting concepts and inventory valuation. It discusses key accounting concepts such as the historical cost concept, money measurement concept, and business entity concept. It also covers the fundamental accounting concepts of going concern, consistency, prudence, realization, and accruals. For inventory valuation, the document explains that inventory should be valued at the lower of cost or net realizable value according to IAS 2. The overall aims are to introduce these accounting concepts and inventory valuation rules.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    You are on page 1of 12

    Accounting Concepts & Inventory Valuation

    AS: Unit 2 Anita McMullen 2012/13

    Aims & Objectives


    Aims: Introduce accounting concepts Introduce inventory valuation Objectives: students will be able to: recognise & explain different accounting concepts Explain the rules of how inventory should be valued

    Introduction
    So far, only concerned with the mechanics of recording transactions ie double entry However, this has been based on certain rules Rules known as Concepts of Accounting.
    Can be custom or practice Can be enforced through accounting standards or Companies Acts

    Financial Statements for all purposes


    Users of financial statements? Do they all need precisely the same information? What would happen if different income statements accounts and statements of financial position were prepared for different users?

    Objectivity & Subjectivity


    Objective
    Based upon a fact/factual occurrence Can be supported by independent evidence

    Subjective
    Based on judgement or interpretation May be bias towards own views & preferences

    Financial Accounting seeks objectivity.

    Rules of Accounting
    Underlying Accounting Concepts
    Custom or practice

    Accounting Standards Board


    Statement of Principles Fundamental Accounting Concepts

    Legal Framework

    Underlying Accounting Concepts


    The historical cost concept The money measurement concept

    The business entity concept


    The dual aspect concept The time interval concept

    What makes financial information useful? Relevance

    Reliability
    Comparability

    Understandability For financial information to be useful it must also be material.

    Fundamental Accounting Concepts


    Going concern

    Consistency
    Prudence Realisation concept

    Accruals (Matching)

    Materiality
    And overriding rule applied to everything Something which could distort the view given by the financial statements Is dependent on judgement

    Size and type of business may affect this decision regarding materiality

    Inventory Valuation
    Lower of cost or net realisable value IAS 2
    Is the cost price lower than the selling price?

    YES

    NO

    Value stock at cost price

    Value stock at selling price (Net Realisable Value)

    Aims & Objectives


    Aims: Introduce accounting concepts Introduce inventory valuation Objectives: students will be able to: recognise & explain different accounting concepts Explain the rules of how inventory should be valued

    You might also like

    pFad - Phonifier reborn

    Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

    Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


    Alternative Proxies:

    Alternative Proxy

    pFad Proxy

    pFad v3 Proxy

    pFad v4 Proxy