Basic AccountingPrinciples and Assumptions

Financial statements reflect the assumption that the business continues operating.

• Going concern assumption

• Matching principle

• Full disclosure principle

• Cost principle

A company reports details behind financial statements that would impact users' decisions.

• Going concern assumption

• Business entity assumption

• Full disclosure principle

• Revenue recognition principle

A company records the expenses incurred to generate the revenues reported.

• Business entity assumption

• Cost principle

• Matching principle

• Full disclosure principle

Information is based on actual costs incurred in transactions.

• Business entity assumption

• Cost principle

• Matching principle

• Full disclosure principle

Every business is accounted for separately from itsowner or owners.

• Business entity assumption

• Cost principle

• Matching principle

• Full disclosure principle

Derived from long-used and generally accepted accounting practices.

• Business entity assumption

• General accepted accounting principle

• Matching principle

• Full disclosure principle

The proprietor of the business is treated as creditor for the capital introduced by him due to_____ concept

• Business entity assumption

• General accepted accounting principle

• Matching principle

• Full disclosure principle

Cost concept basically recognises ____

• Historical Cost

• Actual Cost

• Realizable value

• Replacement cost

In income measurement, recognition of assets and liabilities, which of the following concepts go together ?

• Time Period, Revenue Recognition, Matching

• Cost, Revenue Recognition, Matching

• Going concern, Cost, Conservatism

• Going concern, Time Period, Revenue recognition

This prevents accountants from over estimating future revenues and underestimated future expenses that could mislead financial statement users.

• Business entity assumption

• Full Disclosure Principles

• Matching principle

• Full disclosure principle