EST REVIEW 2022

How many financial accounting conventions and principles are there?

• 5

• 4

• 7

• 6

This principles requires the owner of the business to keep their personal transactions separate from those of the buiness.

• accounting entity

• historical cost

• monetary

• materiality

Requires all balance sheet assets to be valued at the origional cost.

• historical cost

• accounting period

• monetary

• materiality

The accounting period assumption cannot be longer than...

• 12 months

• 3 months

• 1 month

It is assumed that the business will continue indefinitely.

• going concern

• accounting entity

• historical cost

• accounting period

A vehicle purchased for $15,000 five years ago is shown in the Balance Sheet at a cost of $15,000.

• going concern

• historical cost

• accounting period

• monetary

Classify all the assets

• cash in the till

• mortgage

• accounts receivable

• cash in the bank

• car loan

Classify the equity.

• furniture

• drawings

• owners interest in the business

• stock/inventory

Classify the item: fixtures and fittings

• equity

• liability

• expenses

• assets

Classify the item: cash at bank

• assets

• equity

• liabilities

• expenses

• income