Question One

Financial statements are normally prepared upon the basis of a number of accounting concepts, conventions and assumptions.

Required

Write short notes on FIVE of the following accounting concepts, conventions or assumptions.

1. Materiality
2. Going-concern
3. Duality
4. Consistency
5. Matching
6. Full disclosure
7. Prudence

Question Two

There are many stakeholders who have an interest in the financial statements of a business organization, other than the existing shareholders.

Required

Give FIVE examples of interested parties (apart from shareholders) and discuss their interest in the financial statement.

Question Three

1. What is meant by the money measurement concept?
2. Explain the concept of prudence in relation to the recognition of profits and losses.
3. Explain the term materiality as it is used in accounting.
4. Explain clearly what is meant by historical cost convention.

Question Four

1. Discuss the fundamental principles of the Code of Ethics for professional Accountants
2. Do you think that such a system of self-regulation is appropriate?

Question Five

The historical cost convention looks backwards but the going concern convention looks forward.

Required:

1. Explain clearly what is meant by;

1. The historical cost convention
2. The going concern convention

2. Does traditional financial accounting, using the historical cost convention, make the going concern convention unnecessary? Explain your answer fully