10.3

(a) Within the field of periodic financial reporting, comment on and distinguish between ‘accounting bases’ and ‘accounting policies’ and relate them to the following fundamental accounting concepts:

(i) the ‘going concern’ concept;

(ii) the ‘accruals’ concept;

(iii) the ‘consistency’ concept;

(iv) the ‘prudence’ concept.

(13 marks)

(b) Explain how the directors of a company attempt to ensure that the annual published financial statements portray a ‘true and fair view’.

(12 marks)

(Total: 25 marks)

(ICSA, Financial Accounting l, December,1984)