Grade 10 Accounting Quiz Challenge!

GAAP sets the standards for the creation of what?

• Income Statement

• Statement of Retained Earnings

• Balance Sheet

• All answers are correct

Antonio, the majority shareholder of a technology company, decided to produce the company's balance sheet whose cash balance included the cash in his own bank account. Would Michael be allowed to do this by GAAP?

• No, because of the revenue recognition principle.

• Yes, because of the full disclosure principle.

• No, because of the economic entity assumption.

• Yes, because of the going concern principle.

What does GAAP stand for?

• Generally Accepted Accounting Practice

• Generally Accepted Accounting Principles

• Generally Acceptable Arithmetic Possibilities

• Geographically Anticipated Air Pockets

How many GAAP principles are there?

• 10

• 7

• 5

• 4

What are guidelines that help a business to prepare the financial statements in a consistent and reliable manner?

• IFRS (International Financial Reporting standards)

• Balance sheet

• Income Statement

• Cash Flow Statement

When preparing financial statements we use the GAAP principles contained in an international set

of accounting standards known as the IFRS.

• Income Statement

• Balance Sheet

• GAAP in South Africa

• Cash Flow Statement

This concept focuses on the valuation of assets which have been purchased by the business - general rule is that assets are to be calculated and entered i the books by the original cost price (quoted on invoice/paid)

• Business Entity concept

• Historical cost concept

• Going Concern Concept

• Matching concept

According to this concept the financial affairs of the business must be kept separate from the financial affairs of the owner-reason being books won't balance if the owners affairs are combined with the business affairs.

• Historical cost concept

• Matching concept

• Going Concern concept

• Business Entity concept

This concept is based on the assumption that the business will continue to operate in the future.

• Historical cost concept

• Business Entity concept

• Going Concern concept

• Matching concept

Matches revenues(income) and costs(expenses) with one another -for each debit entry there is a

credit entry…

• Matching concept

• Going Concern concept

• Business Entity concept

• Historical cost concept