Quizlet 11AC Accounting Concepts & Elements

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  1. Accrual Basis: This is the idea that the effects of transactions and other events are reported in the period in which they occurred.
  2. Administration Expenses: Those expenses that are paid while organising the business operations.
  3. Assets: Resources presently controlled by the business as a result of a past transaction from which future economic benefits are expected to flow into the business.
  4. Capital Expenditure: Spending by the business to buy an asset and to get the asset into the business ready to use.
  5. Current Assets: Assets that are either cash or likely to be turned into cash in the next 12 months.
  6. Current Liabilities: Amounts that have to be repaid in the next 12 months
  7. Distribution Costs: Those expenses that are paid while selling the good or service or getting it to customers.
  8. Equity: The amount owed by the business to the owner
  9. Expenses: Decreases in economic benefits which either decrease assets or increases liabilities that result in a decrease in equity other than the owner’s drawings
  10. Financial Costs: Those expenses that are paid while getting money into the business (loans).
  11. Going Concern: This is the idea that the business will continue its present operations into the foreseeable future (the business has no plans to close down).
  12. Historical Cost: This is the idea that we record the value of assets at their purchase (or original cost).
  13. Intangible Assets: Non-physical assets that will provide a future economic benefit for the business
  14. Investment Assets: Money which has been invested long-term which will provide future income
  15. Liabilities: Present obligations of the business as a result of a past transaction which are expected to result in an outflow of future economic benefits from the business.
  16. Monetary Measurement: This is the idea that all transactions, assets, liabilities, expenses, income and equity are recorded in dollar terms (using the same currency).
  17. Non-current Assets: Assets that are NOT expected to be converted into cash in the next 12 months.
  18. Non-Current Liabilities: Amounts that do not have to be repaid (in full) in the next 12 months
  19. Period Reporting: This is the idea that the economic activity of a business (that is a going concern) is divided into separate equal periods of time (month, six months, one year).
  20. Property, Plant & Equipment: Assets with long term use which will provide future economic benefit for more than one year
  21. Revenue Expenditure: Spending by the business on its day-to-day operations to keep it and its assets going.
  22. Revenues: Increases in economic benefits which either increase assets or decreases liabilities that result in an increase in equity other than the owner’s contributions
  23. The Accounting Entity: This is the idea that the business is a separate entity from its owner (and all other entities).