1st Semester Mid-term Exam [Accounting]

Which accounting concept should be considered if the owner of a business takes goods from inventory for their own personal use?

• Materiality Concept

• Accrual Concept

• Going Concern Concept

• Business Entity Concept

Sales revenue should be recognized when goods and services have been supplied; costs are incurred when goods and services have been received.

Which accounting concept governs the above?

• Business Entity Concept

• Substance Over Form Concept

• Accruals Concept

• Objectivity Concept

Which accounting concept states that omitting or misstating this information could influence users of the financial statements?

• Consistency Concept

• Materiality Concept

• Prudence Concept

• Money Measurement Concept

Which of the following accounting concepts means that similar items should receive a similar accounting treatment?

• Periodic

• Materiality

• Consistency

• Continuity Of Activity

Financial Statement is unable to show whether there is a serious problem with the workforce of a company. This is main limitation of adopting _____________________ Concept.

• Accruals

• Materiality

• Consistency

• Monetary Measurement

“Liabilities are divided into Current Liabilities and Non-current Liabilities and are settled when they become due.” Which of the following accounting concepts is the above statement based on?

• Going Concern

• Business Entity

• Conservatism

• Monetary Measurement

Inventory is to be valued at the lower of cost and net realisable value. Which accounting concept is being applied?

• Cost

• Accrual

• Conservatism

• Substance Over Form

Which of the following statements about accounting concepts and the characteristics of financial information are correct?

• The concept of accruals requires transactions to be reflected in the financial statements once the cash is received or paid.

• Information is material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements.

• The concept of substance over form is to reflect the economic reality of a transaction.

• Historical cost concept provides an objective basis for recording the value of assets.

You are required to calculate Gross Profit Margin as at 31 Dec Year 2.

【Using the Financial Statement of Ecer Bhd in page 8-11 of Accounting Text Book.】

• 50%

• 25%

• 60%

• 45%

You are required to calculate Net Profit Margin as at 31 Dec Year 2.

【Using the Financial Statement of Ecer Bhd in page 8-11 of Accounting Text Book.】

• 50%

• 25%

• 60%

• 45%