61112 THE ANATOMY OF FINANCIAL ACCOUNTING ESSAY ASSIGNMENT Cost principle recognises that transactions are recorded as they occur in the money value at that time. The effect of recording these transactions at historical cost is that in both the revenue statement and the balance sheet there will be a mixture of cost incurred in various periods. Accrual Principle recognises of an expense for benefit received but not yet paid for, or the recognition of revenue that …
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showed last 75 words of 852 total
…and explanatory notes. The CCA method differ from the historical cost in number of ways. Profit under CCA is measured by increments in capital. The balance sheet is constructed to disclose the defined measure of capital by appropriate adjustments to items such as cost of goods sold, depreciation, gains and losses on holding monetary items, non monetary assets bought and sold on the same market, investments in associated companies and foreign currency translation. ------------------------------------------------------------------------ **Bibliography**