Accounting Assumptions And Principles ...

8.2


1. A company’s financial year does not have to begin on 1 January, like the calendar year.

2. If an American company owns a company in Britain, this is a subsidiary

3. Multinationals, with companies in lots different countries, combine all their results in one set of consolidated financial statements.

4. Every entry in a company’s accounts must be shown; there must be a document available showing that it’s true


8.3
                         Verb                    Noun                         Adjective

                       as'sume                     assumption                          assumed

                      disclose                      disclosure                             disclosed

                      object                        objectivity                            objective

                    recognize                     recognizance                        recognizable

                    subject                         subjectivity                           subjective

                    verify                            verification                           verifiable


1. Both the internal and external auditors have to verify the accounts


2. Companies have to recognize all relevant financial information in their annual reports

3. Despite the subjectivity principle, accountants have to make some subjective judgments.

4. Even if a company is going through a bad period, for accounting purposes we disclose it’s a going concern