Basic accounting terms and principles

The definition of an Asset is

• The cost of running the business

• Items of value owned by the business

• Items owned by the business

• money owed by the business to external parties

Which of the following item is not an asset.

• Cash at Bank

• Motor Vehicle

• Stationery

• Inventories

A Bank Loan is classified as a:

• Revenue

• Expense

• Asset

• Liability

For every transaction, at least how many accounts are effected.

• one

• two

• three

• four

when the owner takes money out of the business's account it is called _________?

• credit

• drawings

• debt

• borrowing

Presenting financial information at cost and not in liquidating values in the view of continued existence of the business is the meaning of

• Accrual basis of Accounting

• Going-concern assumption

• Separate entity assumption

• Historic cost

That revenue is recognized when earned and expenses are recorded when incurred are the applications of:

• Accrual basis of Accounting

• Going-concern assumption

• Separate entity assumption

• Revenue Recognition

The properties of the business are not the properties of the owner.

This is in view of the:

• Accrual basis of Accounting

• Going-concern assumption

• Separate entity assumption

• Dual Aspect

Which of the following items would not fall under the definition of an asset ?

• Creditors

• Debtors

• Cash

• Machinery

Concept: When a business activity is large enough to impact business decisions, it should be recorded clearly in the financial statements

• Historical cost

• Materiality Principle

• Full Disclosure principle

• Verifiable Objective Principle