What do you understand the function of "Accounting Assumption Page" for your UBS project..?

During the class of Accounting Information System (AIS), Sir Noreffendy has touch about the accounting assumption page for the report of after we finish our UBS project. The use of accounting assumption page is to clarify all the details put in the UBS project that does not have supporting documents. Based on what he have told us, there are many cases come out upon the business transactions of a company.  There are several points need to put on the accounting assumption page after finish the UBS project.

1. Lack of information.

       Different companies have different kind of sources of document based on the nature of the business itself. There are some difficulty happen faced by account department itself as the companies might or might be have complete documents and data needed for preparing Statement of Comprehensive Income and Statement of Financial Position. So, as preparation, the problem arise have their solution. For example, the electricity expenses is not available due to lost of document. All is need is the assumption figure based on collection  information of the document by interview with the owner of the company on how much usually they spend for the electricity and ask whether there expenses is increasing or decreasing in the months selected.

2. Information not available.

        The availability of information actually will effect the accountant during performing their job. For example, KFC company have many employees. But there are some of workers are doing part time job to gain more income especially students. But KFC did not record the part time salaries expenses as their record the salaries expenses for permanent workers. In this case, the information of part time expenses not disclose to the accountant, it will effect the financial statement. The excessive expenses will occur that the accountant cannot trace the problem arise as there are no supporting document for the expenses. The assumption figure is used based on the collecting all the supporting document and ask the in charge person of KFC company to record back all the expenses of part time salaries as a prove.

3. New information.

        All the companies have the same purpose which is to maximizw profit and minimize their cost. The different between all the business companies is their nature either by selling product/goods or provide services.The companies nature of business by service such as financial institution and by product such as Giant and Tesco. There are also a company that operate by both nature which are selling goods and provide services such as Auto-Mobile. There are some problems arise for the accountant to record all the transaction for the Auto-mobile company because it have two nature of business. The problem arise when they enter the batches in the UBS system whether they should separate the sales or combined it. Assumption figure is used by enter two kind of batches which the first one is Sales-for the goods sell and Sales (Service)- for the service provided. It is means that the information assist should be inform as a references in the future time.

4. Transction on Cash basis.

        There are certain company use cash basis such as enterprise company. So, all the transaction are based on cash and no document involved. So, as the accountant to prepare the financial statement, there have to disclosed in the accounting assumption page as the transaction is used based on cash basis.