ACC117 - Topic 2

Business is assumed to have an indefinite life presumed to be healthy and likely to continue in business for the foreseeable future) unless there is going to be liquidated in the near future. This refers to

• Going concern concept

• Separate entity concept

• Historical cost concept

• Money measurement concept

Records reports transactions in monetary terms (Ringgit Malaysia in the case of Malaysia). This refers to

• Going concern concept

• Separate entity concept

• Historical cost concept

• Money measurement concept

The owner transfers his personal assets to the business for business use As a result the assets are now considered to be the property of the business (business viewpoint) investment (owner’s viewpoint). This refers to

• Going concern concept

• Separate entity concept

• Historical cost concept

• Money measurement concept

Which of the following is not enhancing qualitative characteristics?

• Comparability

• Verifiability

• Understandability

• Relevance

Which of the following is not fundemental qualitative characteristics?

• Timeliness

• Faithful representation

• Relevance

The purpose of ______________ is to guide the preparation and presentation of financial statements in accordance with the Malaysian Financial Reporting Standards (MFRS) framework or Financial Reporting Standards (FRS) framework.

• accounting standards

• conceptual framework

• accounting principles

• qualitative characteristics

Misstating the information could influence decisions that users make on the basis of financial information. This relates to:

I. Materiality

II. Relevance

III. Faithful representation

• I only

• II only

• I and II only

• All of the above

Mr. Didi pay his son’s educational insurance using business money and charged the amount as business expenses. Mr. Didi violated the business entity concept.

• True

• False

Timeliness means that financial information must be available before it loses its capacity to influence decisions.

• True

• False

Confirmatory value is used in predicting the eventual outcome of past or current events.

• True

• False