Tema 1.

3/ Tema accounting policies & standards

7.1

1. c

2. e

3. d

4. a

5. b

7.2

1. False because there are a range of methods of valuation and measurement accepted by law and
official accounting standards.

2. False because companies have to abide by the consistency principle unless there is a good reason
to change a policy.

3. True because the choice of policies with regards to depreciation, the valuation of stock or
inventory and the making of provisions can make a big difference to the final profit figure.

4. False because companies have to give a true and fair view of their financial situation meaning
there are various possibilities rather than the true and fair view which would mean only one is
possible.

5. True because in many countries accounting follows the historical cost principle. This is more
objective and the current value is unimportant if the business is a going concern.

6. True because inflation accounting systems take account of changing prices.

7.3

Verb Noun(s) Adjective

‘Calculate Calcu'lation -
- Con’sistency Con’sistent
- Con’vention Con’ventional
‘Measure ‘Measurement -
Pre’sent Presen’tation -
‘Value Valu’ation ‘Valuable