Accounting is a vital and pervasive activity in any ordered economic society. It supplies the information which decision-makers will rely on in the allocation of scarce resources. It enables the performance of the business to be evaluated and ensures that rational decisions are taken about the future operations of thebusiness. For example, the business may want to access finance in the future. …
Accounting policies are the specific principles, bases, conventions, rules and practices applied by a business in preparing its financial statements. An example would be changing from one basis of assigning cost to inventory to another. The impact of events on assets and liabilities is recognised (recorded) in the accounting records in the period when the service is rendered or the sale (revenu…