Accounting Principles Quiz

The accounting principle that states companies and owners should be accounted for separately.

• business entity concept

• going concern concept

• monetary unit assumption

• periodicity assumption

Companies not disclosing an imminent bankruptcy would violate the:

• monetary unit assumption

• going concern concept

• business entity concept

• periodicity assumption

The assumption that states that businesses can divide up their activities into artificial time periods.

• periodicity assumption

• business entity concept

• monetary unit assumption

• going concern concept

Assets are recorded at their original purchase price according to the:

• materiality principle

• historical cost principle

• cost benefit principle

• consistency principle

Management concealing important financial information violates the:

• consistency principle

• historical cost principle

• full disclosure principle

• materiality principle

What is not a value of accounting relevance?

• predictive value

• reliability

• feedback value

• timeliness

What is not a value of accounting reliability?

• verifiability

• representational faithfulness

• neutrality

• timeliness

Switching accounting principles every year would violate the:

• historical cost principle

• conservatism principle

• consistency principle

• full disclosure principle

Recording expenses and revenues in the same period in which they occur.

• industry practices constraint

• objectivity principle

• matching principle

• historical cost principle