1What are the purposes of trial balance?
Facilitate prepration of finanicial statements and ensure arithmetic accuracy in recording
2What is the limitation of trial balance?
A balanced trial balance is not absolute proof of accuracy. There may be errors not revealed by it
3What is Going Concern Theory?
It states that businesses are assumed to operate forever
4What is Accounting Period Theory?
The life of a business is divided into regular time intervals to provide timely information for stakeholders to make decisions.
5What is the statement of Financial Performance
It shows the income earned and expenses incurred for a period of time. It informs stakeholders of the profitability of a business
6What is the statement of Financial Position
It lists the assets, liabilities and equity of a business at a specified date. It provides information on how resources are obtained and used in a business and the claim by the owner(s) on the net assets of the business at a point in time
7Non-current assets vs current assets
Benefits last beyond 1 financial year and not easily converted to cash vs benefits used within 1 financial year and easily converted into cash
8Non-current liabilities vs current liabilities
Due to be paid beyond 1 year and consolidated as long-term borrowings vs due to be paid within one financial year