ICFE SPEAKING PRACTICE Pt II – Long Turn
PEU (F) Unit 8 Accounting Assumptions and Principles
Read Professional English in Use - Finance Unit 8, “Accounting Assumptions and Principles”
before giving a one minute talk on the following topic:Accounting assumptions
● What assumptions are made by accountants
● How these assumptions differ from reality
● Why these assumptions are made
ICFE SPEAKING PRACTICE Pt II – Long Turn
PEU (F) Unit 8 Accounting Assumptions and Principles
Read Professional English in Use - Finance Unit 8, “Accounting Assumptions and Principles”
before giving a one minute talk on the following topic:Accounting principles (1)
● the full-disclosure principle
● the principle of materiality
● how these principles affect a business’s financial reports
ICFE SPEAKING PRACTICE Pt II – Long Turn
PEU (F) Unit 8 Accounting Assumptions and Principles
Read Professional English in Use - Finance Unit 8, “Accounting Assumptions and Principles”
before giving a one minute talk on the following topic:Accounting principles (2)
● the principle of conservatism
● the principle of objectivity
● what factors can make objectivity difficult
ICFE SPEAKING PRACTICE Pt II – Long Turn
PEU (F) Unit 8 Accounting Assumptions and Principles
Read Professional English in Use - Finance Unit 8, “Accounting Assumptions and Principles”
before giving a one minute talk on the following topic:Accounting principles (3)
● the revenue recognition principle
● the matching principle
● how these principles affect a business’s financial reports
ICFE SPEAKING PRACTICE Pt II – Long Turn
PEU (F) Unit 8 Accounting Assumptions and Principles
Read Professional English in Use - Finance Unit 8, “Accounting Assumptions and Principles”
before giving a one minute talk on the following topic:Accounting principles (4)



The revenue recognition principle
The matching principle
How these affect the calculation of gross profit (Sales Revenue less Cost of Goods Sold)
ICFE SPEAKING PRACTICE Pt III – Pair Discussion (3 minutes)
PEU (F) Unit 8 Accounting Assumptions and Principles
You and a colleague are meeting to prepare for a new client who wants to know what information
to include when recording transactions for sales, such as the revenue and the expenses for the
business.
Discuss with your partner and agree what to tell the new client
Consider in your discussion the following points:



A basic definition of the term “reporting period.”
What the revenue recognition and matching principles are and how they are related
What this means for the client identifying and recording sales transactions and associated
costs.
ICFE SPEAKING PRACTICE Pt III – Pair Discussion (3 minutes)
PEU (F) Unit 8 Accounting Assumptions and Principles
You work in the accounting department. A senior manager has asked you to give a talk at the next
training course and explain to a group of new employees certain aspects of the assumptions and
principles used in the preparation of the company’s financial reports.
Discuss and agree on what to tell the new employees about:  The basic difference between accounting assumptions and principles.
 What the reporting period and matching principles are and how they are related
 Some of the stakeholders that are interested in the information provided in the financial
reports.
ICFE SPEAKING PRACTICE Pt III – Pair Discussion (3 minutes)
PEU (F) Unit 8 Accounting Assumptions and Principles
You work in the accounting department. A senior manager has asked you to give a talk at the next
training course and explain to a group of new employees certain aspects of the assumptions and
principles used in the preparation of the company’s financial reports.
Discuss and agree on what to tell the new employees about:  The separate entity and going concern assumptions and how they are related.
 What the reporting period and matching principles are and how they are related
 Some of the stakeholders that are interested in the information provided in the financial
reports.
ICFE SPEAKING PRACTICE Pt IV – Interview
(3-4 minutes)
PEU (F) Unit 8 Accounting Assumptions and Principles
In this part I'd like to ask you both some questions related to these two accounting assumptions
and principles:
Student A:- Ask you partner the ODD numbered questions (1,3, etc)
Student B: – Ask you partner the EVEN numbered questions (2,4, etc)
1. What is an accounting “assumption” and why are these assumptions used?
2. What is the reason accountants use the matching principle when preparing financial
reports?
3. Please explain why it is necessary to recognise revenue in the period it is earned.
4. What errors or mis-statements of financial information might occur if the matching principle
is not followed?
5. What does the matching principle say about costs related to revenue when the costs need
to spread over more than one financial year, such as depreciation?
6. Does the matching principle only apply to costs associated with sales revenue?
7. Do you agree with the statement that revenue is not always earned when a sale is made?
Why (or why not)
8. Can you give any examples of when revenue may be recognised before a sale is made?
9. Why might this occur?
10. Does an accountant have a choice about whether to apply the matching principle when
preparing financial information? Why or why not?
11. What is the objectivity principle and when does it apply?
12. What is the conservatism principle and why is it important for accountants?
13. What does the materiality principle mean for the type of information that has to be reported
in financial statements?
14. What does the full disclosure principle mean for the type of information that has to be
reported in financial statements?
15. What is separate or business entity concern assumption?
16. What is the time period assumption?
17. What is the continuity or going concern assumption?
18. What is the unit-of-measure assumption?
19. What does the unit-of-measure assumption mean for companies with international
operations?