The University of the West Indies

DISTANCE EDUCATION CENTRE

DE C

INTRODUCTION TO FINANCIAL ACCOUNTING

 The University of the West Indies, 1999

This publication may only be reproduced, stored or transmitted, in any form by any means, with prior permission, in writing, from The University of the West Indies. Enquiries concerning reproduction or licensing should be forwarded to the following address:

Directors Office Distance Education Centre The University of the West Indies P.O. Box 64 Bridgetown, Barbados

UWI Course Team

Writer: Editor: Proofreading: Page Composition: Instructional Design & Coordination:

Arlene Chambers Charmaine McKenzie Charmaine McKenzie Donna-mae Tibby Karlem Mair

The University wishes to acknowledge the contribution of the Dutch government to the preparation of materials on which this Study Guide is partially based.

This Study Guide is one of a series produced for the B.Sc. Management Distance Programme.

ISBN: 976-41-1028-3

Contents
Introduction to the Course ..................................................................................................... 5 Unit 1 Introduction to Financial Accounting .............................................................. 7
Overview .....................................................................................................................................7 Objectives ................................................................................................................................... 7 Definition, Need and Use of Accounting ...................................................................................... 9 Business Organisations and Accounting Concepts ..................................................................... 15

Session 1 Session 2

Unit 2

The Basics of Accounting ............................................................................... 23

Overview ...................................................................................................................................23 Objectives ................................................................................................................................. 23 Classification of Accounts and the Accounting Cycle ................................................................. 25 Recording Accounting Information ............................................................................................ 31 Rules for Posting Transaction ..................................................................................................... 41

Session 1 Session 2 Session 3

Unit 3

The Trial Balance and Its Uses ....................................................................... 55

Overview ...................................................................................................................................55 Objectives ................................................................................................................................. 55 The Trial Balance .......................................................................................................................57 Preparing Simple Financial Statements ...................................................................................... 67 Errors and the Correction of Errors ............................................................................................. 71

Session 1 Session 2 Session 3

Unit 4

Adjustments ................................................................................................... 83
Overview ...................................................................................................................................83 Objectives ................................................................................................................................. 83 Accruals and Prepayments ......................................................................................................... 85 Bad Debts ..................................................................................................................................91 Bad Debts Provision ................................................................................................................... 95

Session 1 Session 2 Session 3

Unit 5

Fixed Assets and Depreciation .....................................................................101

Overview ................................................................................................................................. 101 Objectives ............................................................................................................................... 101 Depreciation Expense .............................................................................................................. 103 Disposal of Fixed Assets ........................................................................................................... 115

Session 1 Session 2

Unit 6

Preparing Final Accounting Statements ...................................................... 125

Overview ................................................................................................................................. 125 Objectives ............................................................................................................................... 125 Other Adjustments .................................................................................................................. 127 Final Accounting Statements Revisited ..................................................................................... 135 Departmental Accounts ........................................................................................................... 155

Session 1 Session 2 Session 3

Unit 7

Partnership Accounts ................................................................................... 167

Overview ................................................................................................................................. 167 Objectives ............................................................................................................................... 167 What is a Partnership? ............................................................................................................. 169 The Accounting Requirements of a Partnership ........................................................................ 173

Session 1 Session 2

Unit 8

Company Accounts ...................................................................................... 185

Overview ................................................................................................................................. 185 Objectives ............................................................................................................................. 185 The Characteristics of a Company ........................................................................................... 187 The Accounts of a Company .................................................................................................... 193

Session 1 Session 2

Unit 9

Internal Control Systems ............................................................................. 201

Overview ................................................................................................................................. 201 Objectives ............................................................................................................................... 201 Control Accounts ..................................................................................................................... 203 Bank Reconciliation Statements ............................................................................................... 209 The Petty Cash Book ................................................................................................................ 217

Session 1 Session 2 Session 3

Unit 10

Accounting for Not-for-Profit Organisations .............................................. 227

Overview ................................................................................................................................. 227 Objectives ............................................................................................................................... 227 What is a Not-for-Profit Organisation? ..................................................................................... 229 Preparing the Accounts ........................................................................................................... 233

Session 1 Session 2

Introduction to the Course

This course, Introduction to Financial Accounting, (MS15A) is designed to introduce you, the learner, to the fundamental principles and underlying assumptions of financial accounting. It is a three-credit, one-semester course and is a compulsory course for persons intending to pursue degrees in Management Studies, Accounting or Economics. Persons who intend to pursue intermediate studies in financial accounting and financial management will also find it particularly useful. There are 10 units in this book, each subdivided into two or three sessions. Monthly teleconferences with the course coordinator are also part of the package. In addition, weekly tutorials are provided where qualitative problems are worked in detail and any problems you have may be addressed. You should be able to complete each session, including the activities and practice exercises, in an hour. The 10 units of the course are: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Introduction to Financial Accounting The Basics of Accounting The Trial Balance and Its Uses Adjustments Fixed Assets and Depreciation Preparing Final Accounting Statements Partnership Accounts Company Accounts Internal Control Systems Not-for-Profit Organisations

By the end of the course, you should be able to complete basic book-keeping functions such as recording and summarising accounting information, and prepare financial statements for single-owner businesses, partnerships and not-for-profit organisations. While we do not use a recommended text for this course, if you wish to further reinforce the material in this book, you may use any text that is used by secondary schools in your country to prepare students for the Caribbean Examinations Council (CXC) examinations. This will provide you with additional practice exercises. A word of advice: there are three ways to ensure that you succeed in any accounting course: practice, practice, practice!

Unit

1
Introduction to Financial Accounting

Overview
In this unit we introduce you to accounting. We start with a definition of accounting and explain the need for accounting information. An outline of the features of a practical accounting system then follows. This unit also gives you an insight into the users of accounting information, the career opportunities available for accountants, and the major forms of business organisations in the Caribbean region. The unit concludes with a review of the concepts and conventions governing the practice of accounting.

Objectives
After reading the unit text, and completing the supplementary learning activities, you will be able to: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. State the purpose of accounting Describe the main features of an accounting system Describe the conventions and concepts used in an accounting system Define the various types of business organisations List the various types of financial statements Define the term balance sheet Define the term profit and loss account (income statement) List the elements of the accounting equation State the purpose of the accounting equation Define the terms assets, capital and liability

Session

1
Definition, Need and Use of Accounting
Introduction
Accounting is the language of business and financial decisions. It has its own vocabulary which should be carefully studied if accounting problems and issues are to be understood and correctly interpreted. The accounting vocabulary is continually expanding to meet the growing needs of commerce, industry and technology. Accounting provides an international yardstick for measuring the performance of businesses of diverse nature so that their relative economic performance may be readily compared. Accounting deals only with business events that can be quantified and expressed in monetary terms. There are many important facts concerning an enterprise that will not be disclosed from an examination of the accounting records. Some examples of these are: The health, age, qualifications and reputation of the enterprises executives The rate of labour turnover and the number of employees The existence of an industrial dispute A new product put on the market by a competitor A profitable contract being negotiated The current market price of the business

Accounting data must therefore be interpreted with these limitations in view.

Definition of Accounting
There is no standard definition of accounting. It is often defined as the process of : accumulating, analysing, quantifying, classifying, recording, summarising, interpreting, and reporting data relating to the economic resources of an enterprise, to all interested parties. In summary, it is a discipline that provides relevant information to decision makers, internal and external to the enterprise. Accounting and book-keeping must not be confused. Book-keeping is the recording aspect of accounting. Accounting may be classified under two main headings financial accounting and management accounting.

The fundamental differences between financial accounting and management accounting as given by Davidson, Maher, Stickney and Well in Managerial Accounting are outlined in Table 1.

Table 1.1 Differences between Financial and Managerial Accounting

Financial Accounting Users Generally accepted accounting principles Future versus past External users of information

Managerial Accounting Internal users of information

Compliance with generally accepted principles of accounting Uses historical data in evaluating performance of the business and its managers

Uses methods not necessarily in compliance with principles

Uses estimates of the future for decision making purposes and historical data for internal performance evaluation Internal cost-benefit analysis evaluation determines how much information is enough More detailed data required about product cost, revenue and profits

Reporting Regulations often specify how requirements much information is enough

Detail presented

Summary data presented

The Need for Accounting

The income tax laws require annually, a return showing the statutory income of individuals and the profit or loss of businesses in each financial year. In the absence of such a return, a commissioner of income tax is authorised to raise an arbitrary assessment on such an individual or business. Without proper accounting records, it would be impossible to successfully resist an overassessment of tax. Should an individual or a business become insolvent, that is, unable to pay its debts, and be taken before the bankruptcy courts, they would have to satisfy the trustee in bankruptcy, from their records, of the cause or causes of their financial failure. Failure to do this would expose them to the maximum penalty of two years imprisonment for the misdemeanour. As a business grows, additional capital will be required. To obtain additional capital by way of bank loans, overdrafts, shares and debentures, for example, the credit-worthiness of the business must be established by the accounting records. On the other hand, if a business has to be sold in

10

whole or in part, the records would provide the proprietors with an invaluable basis for negotiating a reasonable price. Proper financial records also provide information either in summary form or in detail, of the amounts owing to the business by its debtors and the amounts owing by the business to its creditors. The business may be a member of a trade association (e.g., master builders association, manufacturers association, retail traders association) which requires its members to furnish at periodic intervals, data relating to sales, purchases, wages, etc. In addition, the business may be required to produce information to a trade board in support of an application for license for the purchase of items from other countries, or to a price control board in support of a submission for price increases. In all these cases, the chief source of information will be the books of accounts. Many businesses are incorporated or formed under what in many countries is called the Companys Act. The Companys Act usually prescribes the minimum accounting records that should be maintained and also specifies that a profit and loss account, a balance sheet and a statement of changes in financial position should be submitted to the shareholders or owners of such companies at annual intervals. In a special sense, the directors of a company can be regarded as trustees of the share holders and they must give an annual accounting of their stewardship. In order to promote efficiency in a continuing business, the managers of the business must be furnished with relevant accounting information frequently, regularly and on a timely basis. This will enable them to make proper decisions, control and direct the activities of the business and also assist them in formulating future policies. Where the workers of a business are represented by a trade union, the union may require accounting information in the course of negotiation of claims for increased wages and other benefits. In addition, it is not unusual for enlightened management to provide employees with accounting information on an annual basis. Finally, accounting information is also useful for preparing schedules of assets for insurance purposes.

Accounting Methods
Accounting may be carried out manually, mechanically and electronically (electronic data processing). We shall be focusing attention on the manual method of accounting. In this way, you will be provided with a background without which it would be difficult to understand and appreciate the controls necessary in the mechanical and electronic methods.

11

Features of a Practical Accounting System

The following features should be expected of a practical and workable system of accounting: It should be very simple, so that even the least experienced member of the accounting staff may understand it. It should be flexible, so as to adapt itself to the changing needs of the business. It should provide a record of the transactions entered into now and at any future date. It should furnish, in an adequate manner, a true and fair view of the resources invested in the business and the income derived from the use of such resources.

Users of Accounting Information

Based on what we have stated so far, it should be clear that the main users of accounting information are: 1. Owners of businesses, who use the information to help them assess the soundness of their investment and to decide whether to change their ownership interests. 2. Trade and loan creditors, either present or potential of the business, who use it to help them to decide whether it is safe to extend credit to the business. 3. Statutory agencies, such as income tax departments, registrars of companies and trade administrators need financial statements to help in evaluating tax returns for assessment and compliance with government rules, regulations and laws. 4. Employees and trade unions use accounting information to assist them in making various employment decisions and in negotiating contracts and benefits. 5. Financial analysts need information so they can evaluate the soundness of businesses for their clients who may wish to make investment decisions, or for stock exchange purposes. 6. Customers of businesses look at accounting information to help them in evaluating their relationship with businesses and in taking decisions concerning possible future business relationships. 7. The managers of the business need information to assist them in decision making, controlling and directing the day to day course of the business, and in helping them to formulate policies and plans for its future.

12

Opportunities for Gainful Employment

There are many employment opportunities for people trained in accounting. Some of the more common ones are listed here. Financial controllers are the chief accounting officers of a business, responsible for supervising the accounting activities of the business. In small businesses, the position is often called chief accountant. Cost accountants are responsible for the processing and reporting of information on the cost of services or of manufactured products. The information is designed to assist management in improving the efficiency of current activities and in increasing profitability. An internal auditor is responsible for investigating and evaluating, in a systematic manner, the functioning of the accounting systems and procedures of a company. The internal auditor also recommends changes where necessary and establishes the extent to which management policies and requirements are being implemented and are achieving their objectives. A book-keeper performs the task of recording and processing accounting data.

These and other related opportunities for gainful employment can be found in: 1. An income tax department, a revenue board, auditor generals department and the accounts branch of various government and quasi-government agencies 2. Firms of practising accountants that perform professional auditing, accounting, taxation and management consultancy services as well as secretarial services on behalf of their clients 3. Accounting and internal audit positions in banking, commerce, industry, utilities, service clubs, cooperatives, charitable institutions, the offices of attorneys and insurance companies 4. Academic institutions

Activity 1.1
1. 2. 3. 4.

Accounting: Definition, Need and Use

How would you define financial accounting? How does financial accounting differ from managerial accounting? What are the essential features of a practical accounting system? Name four entities that would use the accounts of a firm. Why would each of these entities need to use the accounts of the firm?

13

14

Session

2
Business Organisations and Accounting Concepts
Types of Business Organisations
The four main types of business organisations are: 1. 2. 3. 4. Single proprietorships or sole traders Partnerships Companies or corporations Cooperatives

A single proprietorship is a business owned by one individual who provides the capital for the business and usually directs and supervises its activities. The owner takes responsibility for the total debt of such a business with unlimited liability. In other words, the owner is solely responsible for all debts, moneys owed, losses, etc., of the business. The opposite is also true: all the profits of such a business accrue exclusively to the owner. A partnership occurs when two or more persons carry on business in common with a view to making profits. The partners usually provide the capital and direct and supervise the activities of the business. All the partners have the right to take part in the general management of the business and are deemed to be agents of each other. The partners are responsible collectively and individually for the total debt of the business; that is, they are jointly and severally liable. A partners liability may also be limited, under the Limited Partnership Act of 1907. In this case, a limited partner is only responsible for debts of the firm to the extent of the capital invested. A corporation or company is a creation of law. The company is an entity, separate and distinct from its shareholders or owners. The company can enter into contracts, can sue and be sued, and can commit crimes and torts like an individual. It is responsible for all its debts. Where there is a limited liability company, the shareholders are only liable for debts to the extent of the sums (if any) unpaid on shares they own. The capital of the company is usually provided by various types of shareholders and debenture holders. The management of the company is usually carried out by a board of directors appointed by the shareholders and by hired managers. A cooperative is defined by the International Cooperative Alliance as an association of persons who have voluntarily joined together to achieve a
15

common end through the formation of a democratically controlled organisation, making equitable contributions to the capital required and accepting a fair share of the risks and benefits of the undertaking in which the members actively participate. Cooperatives have considerable freedom to draw up their own bylaws, but there are certain principles and practices setting off a cooperative from a private business, to which all cooperatives must adhere.1 These principles include the following: 1. Voluntary membership without artificial restrictions or any social, political or religious discrimination to all persons who can make use of the services of the cooperative and who are willing to accept the responsibility of membership. 2. Cooperative affairs should be administered by persons elected or appointed in a manner agreed by the members and accountable to them. 3. Share capital should receive only a strict limited rate of interest, if any. 4. The economic benefits resulting from the operations of the cooperative belong to its members and should be distributed in such a manner as would avoid one member gaining at the expense of others. 5. All cooperatives should make provision for the education of their members, officers and employees, and the general public, in the principles and techniques of cooperation, both economic and democratic. 6. All cooperative organisations, in order to serve the best interest of their members and their communities, should actively cooperate in every practical way with other cooperatives at local, national and international levels.

Financial Accounting Statements

When all the accounting information is collected and recorded in the appropriate accounts for a particular time period, various financial statements can be prepared. The two financial statements that we will be focusing on in this course are: 1. The trading and profit and loss account 2. The balance sheet The trading and profit and loss account is used to determine whether the entity has made a profit or incurred a loss for the period under review. The trading and profit and loss account is also referred to as an income statement.

1 Financial Reporting for Cooperative Businesses by Margaret Mendes, Caribbean Finance and Management, 1993

16

The balance sheet shows a summary of the balances on the various accounts at a particular point in time. The balance sheet actually shows the financial position of the entity, as it reflects the sources of funds and how these funds have been used.

The Accounting Equation

We pointed out above that the balance sheet indicates the sources of funds and how these funds were used. Funds are normally necessary to start a business or to finance the business during its operation. These funds may either be supplied by the owner or by a loan from a lending institution, for example. The funds supplied by the owner are referred to as capital, whereas loans to the business are referred to as liabilities. In broad terms, a liability is anything owed by the entity to outsiders. Capital is a special type of liability, as it represents funds owed by the entity to the owner. Liabilities may also be incurred when goods are bought on credit or when amounts become due and are not paid within the period in which they become due. Funds received are used to acquire property for the business such as furniture, plant, machinery and stock. These properties are referred to as assets. Assets may be defined as anything owned by or owing to the entity. From the foregoing, it should be clear to you that the funds supplied by the owners and others are used for the acquisition of assets. Therefore, the sum of the capital (C) and liabilities (L) must be equal to the assets (A). This is represented here in the following simple equation: C+L =A This is referred to as the basic accounting equation.

Accounting Conventions, Assumptions and Principles

Accounting principles are built on the foundation of a number of basic concepts that accountants regard as self-evident. When such concepts are followed unquestioned for generations by the accounting profession, they are called conventions and for accountants, they have acquired a force akin to law. Some of these concepts and basic assumptions are being challenged by economists, securities commissions, businessmen and even accountants themselves. Nevertheless, in order to understand accounting as it now exists, one must understand what the underlying concepts, assumptions and principles are. These concepts, conventions, principles and practices are referred to as Generally Accepted Accounting Principles, abbreviated GAAP.

17

The Entity Concept

Accounts are kept for each economic unit, called an entity, as distinct from the persons who own the entities. For example, John Brown may own several businesses; however, separate accounts showing the transactions, the profitability and the financial position must be kept for each business. In small businesses, particularly corporate businesses, problems may arise in distinguishing between the owners and the entity. In companies that have subsidiaries, there may be important problems involved in defining the entity for which consolidated accounts are prepared. In government and non-profit organisations that do not control sub-units by stock, there are great difficulties in defining the entity. The concept of entity, although applicable to sole traders and partnerships for purposes of accounting, is not recognised legally and in the case of bankruptcy, all the personal assets of the sole trader or partner must be used to satisfy the debts of the business. In accounting, the business owns the resources and not the owner. For example, if Mrs. A starts a business with $100,000, from the point of view of the business, the owner, Mrs. A is a long-term creditor of the business and the business therefore owes Mrs. A $100,000. Each entity is assumed to own its assets and incurs its liabilities. The assets, liabilities and activities of the business are kept separate from those of the owner of the business and from the assets, liabilities and activities of other businesses, even though they may be owned by the same person. Separate sets of accounting records are maintained for each business and the financial statements must reflect the financial position and results of the operations of that business alone.

Cost Concept
The resources of a business are recorded in the accounts at the amounts paid to acquire them rather than at current market prices. Cost, therefore, is the basis for the future accounting for the resources. This concept provides an objective basis for accounting as the figures are largely verifiable, thus limiting the scope for subjective considerations. It should be noted that there are exceptions to the cost concept. Inventories of finished goods, raw materials and marketable securities are shown in the balance sheet at cost or net realisable value, whichever is lower. Depreciation and write-off of fixed assets do not reflect changes in the market value of the asset, hence the cost concept is maintained.

Going Concern Concept

Accounting assumes that the business will continue to operate indefinitely and that it is not about to be liquidated or scaled down substantially. The concept of the going concern does not assume that the business will exist forever, but that it will operate long enough to use up its fixed assets and to pay off its long-term loans as they mature, that is, for the foreseeable future.

18

This explains why accounting does not attempt to record the liquidation or current market value of individual fixed assets.

Money Measurement Concept

This concept provides a common denominator for measuring the results of diverse business activities. Accounting deals with facts that can be measured in monetary terms with a fair degree of objectivity. There are no exceptions to this concept, although business information that cannot be quantified is often provided in supplementary statements, such as directors reports. Although the purchasing power of the monetary unit may change because of inflation or deflation, accounting does not normally reflect these changes in purchasing power except in supplementary financial data which some companies publish. Accordingly, the monetary unit used in accounting is not a unit of constant purchasing power.

Dual Concept
The total amount of assets equals the total of the owners equity (financial interest) and total liabilities. There are absolutely no exceptions to this concept. It is important because conceptually, it aids in understanding the effects of transactions on an accounting entity. If you understand that for every debit there must be a credit, you will recognise the dual aspect of transactions.

Time Period Concept

Accounting measures activities for a special period of time, usually one year; it does not measure at the completion of each project or venture. Reporting the results to management and to third parties at frequent intervals is obviously necessary. The necessity of doing this causes much of the difficulty in accounting. There are problems associated with accrual accounting, which we will look at in detail in a later unit. However, in measuring the net income of an accounting period, the revenues and the expenses that belong to that accounting period must be estimated. These estimates depend in part on what is going to happen in future periods and this is often mere conjecture.

Conservative or Prudence Concept

Revenues are recognised only when they are reasonably certain, whereas expenses are recognised as soon as they can be reasonably estimated. This concept explains why bad debt provision is made in the period in which the related revenue is recorded. It also explains why stocks, that is, inventories of finished goods or raw material, are valued at lower costs or market value.

19

Realisation Concept
This concept states that revenues should be recorded in the period when the goods are delivered to the customer or when the services are rendered. The amount recognised is the amount that the customer has a legal obligation to pay. Many problems arise as to both the period in which the revenue for a given transaction should be recognised, and the amount of such revenue. An example of one such problem would be a contract for the sale of sugar at a later date where the price is decided upon now.

Matching or Accrual Concept

Where a given event affects both revenues and expenses, the effect of each must be recognised in the same accounting period. This therefore means that revenue must be matched against the costs incurred in earning such revenue. Costs are reported as expenses in the period: 1. Where there is a direct association between costs and revenue of the period 2. When costs are related to the activities of the period itself 3. When costs cannot be associated with revenues of any future period Differences of opinion about the application of this concept and the realisation concept are at the heart of many accounting controversies.

Consistency Concept
Once an entity has decided upon a certain accounting method or treatment, it is expected that it will treat subsequent transactions of the same character and nature in the same fashion unless there is reasonable justification for doing otherwise, such as a method of valuing stock or method of depreciation of certain fixed assets. The concept is usually followed in theory, but the practical problem is to decide when a sound reason for change exists. Although the desire to increase the amount of net revenue reported in a current period is at the root of some changes in method, this is definitely not an acceptable reason for a change. A statement of standard accounting practices requires that a change of this nature should be reported as a change in accounting policy and that the effect on profits should be stated.

Materiality Concept
Materiality is used in accounting to refer to the relative size or importance of an item or event. What is material in one business may be insignificant in another. For example, small expenditure in the acquisition of fixed assets may be immediately expensed instead of being capitalised and depreciated over the useful life of the asset. This is usually done to reduce the clerical labour involved and the expenditure that would be incurred to keep the records, as this would be out of proportion to the advantage to be gained.

20

In essence, the concept allows insignificant events to be disregarded in the accounts but requires full disclosure of all important information. An item is deemed to be material if there is reasonable expectation that the knowledge of it would influence the decision of the users of the financial statements. The general notion is that an item is material if its disclosure is likely to lead the user of the accounting information to act differently or to come to a different conclusion if it were not disclosed.

Activity 1.2
1. 2. 3.

Business Types and Accounting Concepts

What is a sole proprietorship? What is a cooperative? What are the two financial statements prepared from the accounts of a firm? What is the purpose of each statement? Explain the accrual concept, the dual concept and the materiality concept.

4.

Practice Exercises
Here are some questions and statements that will help you to determine how well you have understood what we covered in this unit. The answers are all to be found in what you just read. Respond to the questions and statements in your own words and without looking back at the text. We suggest that you put them in a special notebook that you will use throughout this course. When you have finished, go back and check your answers against the material in this study guide. 1. 2. 3. 4. 5. Describe the concept of accounting. What is the difference between accounting and book-keeping? Describe at least three cases that demonstrate the need for accounting. List and describe at least five users of accounting information. List and describe some of the job opportunities and where one might find gainful employment in the accounting field. Describe the three main types of business organisations. Define the following terms: capital, liabilities, assets. Write out and explain the accounting equation.
21

6. 7. 8.

9. 10. (i) (ii) (iii) (iv) (v)

What does GAAP represent? Write brief notes to explain each of the following concepts: entity cost money measurement conservative (prudence) going concern (v) (vi) (viii) (ix) time period realisation going concern consistency

22