Consider each of the situations listed below. Identify the accounting convention(s) which would be used to determine the appropriate accounting treatment of each situation.

(a) A business is preparing accounts for the year ended 30 September. The most recent telephone bill paid by the business is dated 31 August. An insurance premium was paid in 1 January, covering the business until 31 December.

(b) A business has an excellent local reputation and enjoys the goodwill of many regular customers.

(c) A business bought a piece of land ten years ago for £10,000. Its market value has now increased to £20,000.

(d) A customer who owes the business £1,000 at the end of an accounting year appears to be in financial trouble and is in danger of going bankrupt.

However, no-one knows for certain whether or not this will happen.

(e) A box of paper clips is bought towards the end of an accounting year.

Some of the clips remain unused at the end of the year.

(f) The owner of a business pays for a holiday out of her personal bank account.

(g) The owner of a business pays for a holiday out of his business bank account.
(h) Goods are sold to a customer in one accounting period but are not paid for until the next accounting period.
(i) Goods are sold to a customer who never pays for them.
(j) A business repays a loan which has been outstanding for some time.