Basic Accounting Concepts and Principles

A company records a building at its original purchase price of RM500,000, even though its market value has appreciated to RM750,000. Which accounting concept is the company applying?

A company incurs expenses related to its revenue in a specific period and records those expenses in the same period as the revenue. Which accounting concept is being applied?

The owner of a small business withdraws $10,000 for personal use. The accountant records this withdrawal separately from the business's financial transactions. Which accounting concept is being followed?

A company prepares its financial statements every quarter, ensuring that financial results are reported periodically. Which accounting concept does this practice represent?

A company recognizes revenue from a sale only when the goods are delivered to the customer, even if the payment is received in advance. Which accounting concept is the company applying?

Every financial transaction in a company is recorded with equal debit and credit entries, ensuring that the accounting equation (Assets = Liabilities + Equity) always balances. Which accounting concept is being followed?

A company chooses not to record a small expense that is deemed insignificant to the overall financial statements. Which accounting concept is being applied?

A company records potential losses from a pending lawsuit in its financial statements, even though the outcome is uncertain. Which accounting concept is the company using?

A company continues to prepare its financial statements under the assumption that it will operate indefinitely. Which accounting concept does this reflect?

When preparing financial statements, a company bases its figures on objective evidence, such as invoices and contracts, rather than estimates or opinions. Which accounting concept is being applied?