accounting rules.docx - The main rules under thee headings boundary rules measurement rules and Ethical rules Entity Data collected should be restricted

accounting rules.docx - The main rules under thee headings...

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The main rules under thee headings: boundary rules, measurement rules and Ethical rules. Entity: Data collected should be restricted to the entity; this can be difficult for a small entity as it might be hard to distinguish between the affairs of the entity and the owner. An example might be charging household bills, the accountant will have to distinguish between what has been used for the business and what has been used privately. Periodicity: Most entities have an unlimited life, so the accountant has to decide when reports are drawn up. This will usually be every year. This can be problematic as the business keeps on going, so this can be quite arbitrary, as things are still going on when the accounts are drawn up. This leads to a need for what is known as accounting adjustments. Going concern: This assumes that the business will keep going for the foreseeable future; this has to be right as if the business is about to close down, different valuations might apply
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