Accounting Principles

Accounting Principles

Assessment

Flashcard

Business

Vocational training

Practice Problem

Easy

Created by

Mariella Mangion

Used 1+ times

FREE Resource

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8 questions

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1.

FLASHCARD QUESTION

Front

Prudence

Back

Prudence, or conservatism, is the accounting principle that drives accountants to take a conservative view of financial affairs, making provisions for bad debts without evidence of non-payment.

2.

FLASHCARD QUESTION

Front

Matching Principle

Back

The matching principle refers to matching revenues with related costs in the relevant period, ensuring expenses are accrued when costs are incurred, even if not yet invoiced.

3.

FLASHCARD QUESTION

Front

Deferred Income

Back

Deferred income is income that is invoiced in advance but only recognized in profit and loss when the product or service is delivered.

4.

FLASHCARD QUESTION

Front

Inventory

Back

Inventory is stock held on the balance sheet until it is used in the business.

5.

FLASHCARD QUESTION

Front

Work-in-Progress

Back

Work-in-progress refers to work carried out on a project that has yet to be billed, treated as a type of inventory.

6.

FLASHCARD QUESTION

Front

Accrual Accounting

Back

Accrual accounting is an accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when cash is exchanged.

7.

FLASHCARD QUESTION

Front

Revenue Recognition Principle

Back

The revenue recognition principle dictates that revenue should be recognized in the accounting period in which it is earned, regardless of when payment is received.

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