Concepts: accrual basis, going concern, entity, reporting period

Each one appears attached to a transaction, never as a bare definition. Exam-style Deposits received in March for shoes delivered in May Treatment and reporting under the accrual basis. The revenue has NOT been earned at 31 March — the shoes have not been delivered. So sales revenue in the Income Statement excludes the deposits: revenue is reduced by that amount. The entity owes goods to those customers → a present obligation → income in advance. Classified as a CURRENT LIABILITY, since the shoes are delivered within 12 months. ✓ Not earned → out of revenue → into a current liability. The accrual basis decides the period; the liability definition decides the classification.

Practice for this standard covers the whole topic — flashcards and quiz.