Advanced Financial Accounting

Advanced financial Accounting

Table of Contents
Introduction.................................................................................................................3
Description of Accounting Concepts.......................................................................3
Conceptual framework and issue related to measurement...................................6
Fundamental qualitative characteristics..................................................................8
Conclusion................................................................................................................11
References................................................................................................................12

Introduction
This assignment is classified into three different sections as the first section include the
description of accounting concepts as these concepts help in managing the monetary
activities of GWA Group Limited. As GWA Group Limited deals in household consumer
products and also listed in the Australian exchange. Another section of this report
describes the conceptual framework of financial statements and also the principle of
accounting, which demonstrates the issues of measurement. Additionally, the last section
of this report includes the qualitative features which assist in examining and also boosting
the understanding of application authenticity.
Description of Accounting Concepts
Accounting concepts include the different conventions which assist in offering the
appropriate framework for the financial reporting as it helps in making the effective
judgments made by the accountants. It is necessary to ensure the implementation of
accounting concepts and principles along with the accounting standard setting bodies
incorporate the reporting framework such as the IASB framework. There are different
accounting concepts which include:
Business Entity Concept: This concept includes the transactions which are to be
accounted from its owners. These are assumed to be different from its owners by doing
accounting. This concept describes the owner's equity, which shows on the liability side of
the balance sheet, but shares capital in this provide effective contribution by a sole trader
to business (Accounting Tools, 2019).
Money Measurement Concept: This concept demonstrates as an only transaction which
having a potentiality of measuring the funds in monetary terms. As per the financial
statements, all the transactions are recorded, but it requires the reduction to the unit of
monetary currency. But on the other side, it is impossible to allocate the reliable money
value to a transaction, but it can be recorded in the financial statements. This concept
helps users in getting great knowledge of financial performance.
Going Concern Concept: It is a fundamental assumption, and according to this, business
organization preparing their financial accounts. This concept helps in predicting the
foreseeable future without the need as it liquidating the entity by its operational activities.
This concept helps in increasing the level related to short term borrowing along with the
overdraft, which is not supported by the increment in business (Chatterjee, 2016). Apart
from this, it describes the inability of the business organization in maintaining the liquidity
rations according to loan agreements. This concept also includes the high financial risk