Untitled Quiz

What does the Single Entity Concept in accounting principles imply?

• Business and its owner(s) are considered the same entity.

• Business and its owner(s) are separate entities.

• Only single-owner businesses are recognized.

• Businesses cannot have more than one owner.

According to the Specific Currency Principle, how should financial transactions be reported?

• In any currency chosen by the business owner.

• In the currency of the country where the business is located.

• In a specific currency such as US dollars or euros.

• In multiple currencies to reflect global operations.

What is the purpose of the Specific Period Principle?

• To ensure all transactions are recorded at the end of the year.

• To cover financial statements over indefinite time intervals.

• To allow for meaningful comparisons and analysis.

• To record transactions in real-time.

How are assets and liabilities initially recorded according to the Historical Cost Principle?

• At their future projected value.

• At their historical cost.

• At their market value.

• At the discretion of the accountant.

What does the Full Disclosure Principle require businesses to do?

• Keep certain financial information confidential.

• Disclose information only to shareholders.

• Disclose all relevant information that could impact users' decisions.

• Disclose only financial information.

Under the Recognition Principle, when should transactions and events be recognized in financial statements?

• Only if they involve cash.

• At the end of the fiscal year.

• At the discretion of the business owner.

• When they meet specific criteria.

What does the Matching Principle ensure?

• All assets are valued at their historical cost.

• All transactions are recorded in the same currency.

• Expenses are matched with the revenues they help generate.

• Businesses operate indefinitely.

What assumption does the Non-Death Principle make about businesses?

• That they cannot operate across borders.

• That they will operate indefinitely unless evidence suggests otherwise.

• That they will eventually go bankrupt.

• That they will change ownership frequently.

What does the Materiality Principle refer to?

• The cost of materials used in production.

• The physical properties of assets.

• The importance of keeping material records.

• The significance of an item in influencing users' decisions.

What does the Conservative Principle suggest accountants should do?

• Invest in conservative financial instruments.

• Always report the highest possible values.

• Avoid disclosing financial information.

• Err on the side of caution when faced with uncertainty.