Chapter 1 - Intro to Financial Accounting (Identification)

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1. asset A resource controlled by the entity as a 14. materiality Omission of such information could
result of past events and from which future influence decisions that users make on the
economic benefits are expected to flow to basis of financial information about a
the entity specific reporting entity
2. comparability Qualitative characteristic that enables users 15. measurement Process of determining the monetary
to identify and understand similarities in, amounts at which the profit or loss
and differences among, items statement
3. consistency Refers to the use of the same methods for 16. net income/ Total of income less expenses, excluding
the same items, either from period to period net loss or the components of other comprehensive
within a reporting entity or in a single period profit/loss income
among entities
17. neutral Without bias in the selection or
4. current cost Amount of cash or cash equivalents that presentation of financial information
would have to be paid if the same or an
18. notes Contain information in addition to that
equivalent asset was acquired currently
presented in the statement of financial
5. equity Residual interest in the assets of the entity position, statement of profit or loss and
after deducting all its liabilities other comprehensive income,statement of
changes in equity and statement of cash
6. expense Decreases in economic benefits during the
flows
accounting period in the form of outflows
or depletions of assets or incurrences of 19. other Items of income and expense that are not
liabilities that result in decreases in equity, comprehensive recognized in profit or loss as required or
other than those relating to distributions to income permitted by other PFRSs
equity participants
20. recognition Process of incorporating in the statement of
7. fair value Amount of cash or cash equivalents that financial profit or loss statement an item
could currently be obtained by selling the that meets the definition of an element
asset in an orderly disposal
21. relevance A fundamental characteristic of a financial
8. faithful A fundamental qualitative characteristic of a information which enables it to make a
representation financial is information which states that the difference in the decisions made by users
information should be complete, neutral and
22. revenue and Increases in economic benefits during the
free from error
gains accounting period in the form of inflows or
9. Financial Standards and interpretations issued by the enhancements of assets or decreases of
Reporting International Accounting Standards Board liabilities that result in increases in equity,
Standards other than those relating to contributions
from equity participants
10. general Those intended to meet the needs of users
purpose who are not in a position to require an entity 23. statement of Inflows and outflows of cash equivalents
financial to prepare reports tailored to their particular cash flow
statements information needs
24. statement of The financial statement that shows the
11. going concern Assumes that the entity has neither the changes in changes in the entity's net assets during a
intention nor the need to liquidate or curtail equity particular period
materially the scale of its operations
25. statement of The financial statement that shows an
12. historical cost Amount of cash or cash equivalents paid or financial entity's assets, liabilities and equity as of a
the fair value of the consideration given to position particular date
acquire them at the time of their acquisition
26. statement of Shows the entity's profit or loss, and its
13. liability A present obligation of the entity arising profit and loss components during a particular period
from past events, the settlement of which is
27. timeliness Having information available to decision
expected to result in an outflow from the
makers in time to be capable of influencing
entity of resources embodying economic
their decisions
benefits
28. total Change in equity during a period resulting from transactions and other events, other than those changes
comprehensive resulting from transactions with owners in their capacity as owners
income
29. understandability Classifying, characterizing and presenting information clearly and concisely
30. verifiability Different knowledgeable and independent observers could reach consensus, although not necessarily complete
agreement, that a particular depiction is a faithful representation