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  1. Accounting Concepts:      Going Concern Concept: Assumes that the business will continue its operations for the foreseeable future, allowing assets to be recorded at their original cost rather than their liquidation value. This concept impacts how assets and liabilities are presented in the financial statements.      Consistency Concept: Requires a company to use the same accounting methods and principles consistently from one accounting period to another. It ensures comparability between financial statements over time, aiding analysis and decision making.      Accrual Concept: Transactions should be recorded when they occur, regardless of when the actual cash is exchanged. This means recognizing revenues when earned (even if the cash hasn't been received) and expenses when incurred (even if the cash hasn't been paid).      Matching Concept: Directly links expenses with the revenues they help generate durin...

 5 Marks   1. Causes of Depreciation: Wear and Tear: Continuous use or aging of assets causes physical deterioration. Machinery, vehicles, and equipment often experience wear and tear through regular use, reducing their value over time. Obsolescence: Assets can become outdated due to technological advancements, changes in market demand, or new production methods. For instance, a computer might depreciate rapidly due to technological advancements making newer models more efficient. Passage of Time: Some assets naturally degrade simply due to time passing. Natural assets like buildings or infrastructures can face depreciation over time. Inadequacy: Assets might depreciate due to inadequacy, meaning they are no longer sufficient for the purpose they were intended for. This can occur if changes in technology or business requirements make the asset less effective or functional.   2. Different Types of Errors:      Errors of Omission: Occur w...

  1. Accounting: It's not just about recording transactions—it also involves interpreting financial information to make informed decisions. It includes financial reporting, auditing, and analyzing economic events. 2. Journal: It's the initial book of entry where transactions are recorded in chronological order. Each entry includes details like date, accounts involved, amounts, and a brief description. 3. Ledger: A ledger contains individual accounts summarizing transactions related to a specific asset, liability, equity, revenue, or expense. It's organized by account type and provides a detailed record of financial activities. 4. Legacy: It refers to outdated systems, processes, or technologies that persist because they were previously used and are still functional. However, they might not be as efficient or effective as newer alternatives. 5. Compensating Errors: These are mistakes that occur in accounting but counterbalance each other, ultimately resulting ...