Aries saputra (014201900078)

Answer the Question

a) From (Dyson & Franklin, 2017): 
Check your learning
2. Identify three categories of accounting rules.
Conventional accounting rules
there are 14 rules for accounting, grouped in 3 categories:
 Boundary rules
There are four important boundary rules: entity, periodicity or period of account,
going concern and monetary quantities.
 Measurement rules
Measurement rules determine how data should be recorded. There are six important
ones. They are: (1) money measurement; (2) historic cost; (3) realisation; (4)
matching; (5) dual aspect and (6) materiality.
 Ethical rules
Ethical rules relate to the moral code or principles expected to be adopted in the
preparation of accounts. There are four main ethical rules: they are (1) prudence; (2)
consistency; (3) objectivity and (4) relevance.

4. What is a going concern?

Going concern, as a core accounting assumption, is the assurance, from the directors of a
company, that the entity can recognise how its liabilities will be funded or underpinned
by its assets for the foreseeable future.
It is a recognised part of any required audit process, where a confirmation is sought that
the figures have been prepared on a ‘going concern’ basis. The recognised assets are seen
as the basis of future delivery, with an underlying presumption that there is no
requirement (for the foreseeable future) to liquidate those assets on an emergency basis,
or to substantively change the operational business model.

11. What is an accounting standard?

Accounting Standards are written policy documents issued by expert accounting body or
by the government or other regulatory body covering the aspects of recognition,
measurement, treatment, presentation, and disclosure of accounting transactions in
financial statements.

News story quiz

1. What are the advantages and disadvantages of a rules-based and a principles-based
approach to regulation and in turn, accounting matters?
Advantages:
 Easy to compare this year’s events with those that happened a year ago.
 Annual comparisons are commonly made in other spheres and therefor acceptable.
 A year reflects the normal climatic seasonal pettern.

Disadvantages:
 It is an artifical period of time.
 It is either to short or long for certain types of bussiness.
 Some of the information included in the annual accounts could be well over 12 months
old bt the time it is reported and it may by then be out of date.

2. Why is a principles-based approach to regulation necessary particularly in times of

economic turmoil?

Because a regulatory approach is needed to realize Quality, simple, and quality National
Regulatory System (SRN) orderly.so that, the regulations will be more capable to work
effectively and efficiently in supporting efforts realizing the goals of the state as set out in the
Preamble to the 1945 Constitution. and the economy was able to improve.

Tutorial Questions
2.1. Do you think that when a set of financial accounts is being prepared, neutrality
should override prudence?
Yes it must, because the set of financial account must be in accordance with existing
data and must also be reported according to existing data. Financial accounts requires the
use of professional judgment in the adoption of accountancy policies and estimates. Prudence
requires that accountants should exercise a degree of caution in the adoption of policies and
significant estimates such that the assets and income of the entity are not overstated whereas
liability and expenses are not under stated. There is a risk that leverage offered in the choice
of accounting policies and estimates may result in bias in the preparation of the financial
statements aimed at improving profitability and financial position through the use of creative
accounting techniques. Prudence concept helps to ensure that such bias is countered by
requiring the exercise of caution in arriving at estimates and the adoption of accounting
policies.
2.7. The following is a list of problems which an accountant may well meet in
practice:
a) The transfer fee of a footballer.
b) Goods are sold in one period but the cash for them is received in a later period.
c) The proprietor’s personal dwelling house has been used as security for a loan
which the bank has granted to the company.
d) What profit to take in the third year of a five-year construction contract.
e) Small stocks of stationery held at the accounting year end.
f) Expenditure incurred in working on the improvement of a new drug.\
 Required:
1. Which accounting rule would the accountant most probably adopt in dealing
with each of the above problems?
2. State the reasons for your choice
a) The transfer fee of a footballer. Transfer Pricing
b) Goods are sold in one period but the cash for them is received in a later period.
Realisation
c) The proprietor’s personal dwelling house has been used as security for a loan which
the bank has granted to the company. History Cost
d) What profit to take in the third year of a five-year construction contract. Periodicity
(of period of account)
e) Small stocks of stationery held at the accounting year end. Monetary Quantities
f) Expenditure incurred in working on the improvement of a new drug. Matching.

b) Please have access on PSAK, then describe what you learn from it.
• Organization
In PSAK, organizational is very important, because PSAK is a framework for referral
procedures in making accounting financial reports. PSAK contains rules related to activities
such as record, compile, perform and also present a financial report. So it takes a
collaboration within the organization in order to complete financial reports with
• Regulation
Regulation is defined as a set of rules that is designed to control and govern conduct by
(Deegan 2009, p.59).
• Types
-PSAK-IFRS
-SAK-ETAP