1.13 Which Theory When?
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VCE Accounting Unit 3. Video of this presentation can be found on my YouTube channel here https://www.youtube.com/channel/UCf5jyuJoYwie8tWfvjEc0zg.
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1.13 Which Theory When?
- 2. Video of this presentation at… YouTube Channel for VCE Accounting
- 3. © Michael Allison. Author’s permission required for external use. The Rules of Accounting Relevance Reliability Comparability Understandability Entity Historical cost Going concern Reporting period Monetary unit Conservatism Consistency Qualitative Characteristics Accounting Principles 1.13 WHICH THEORY WHEN?
- 4. © Michael Allison. Author’s permission required for external use. In many instances the “right” answer will depend on how a question is asked. The “right” answer for a question may be the “wrong” answer if the question is put another way Example: Janet owns a business with a vehicle purchased for $8,000 five years ago. This week’s on carsales.com, similar vehicles are being sold for $6,000. Her sister needs a car urgently and has offered to pay $8,200 for the vehicle. The vehicle has always been valued at $8,000 in the firm’s books. 1.13 WHICH THEORY WHEN? Historical cost? $8,000 Relevance? $8,200 Reliability? $8,000 Consistency? $8,000 Comparability? $8,000 Conservatism? $6,000 Comparability? $8,000 Consistency? $8,000 Historical cost? $8,000 Relevance? $8,200 Reliability? $8,000 Conservatism? $6,000
- 5. © Michael Allison. Author’s permission required for external use. TASK In-class Homework SQ32 X