Accounting Concepts & Conventions test

What is GAAP?

• Governmentt accounting & auditing principles

• General Accounting and Auditing Procedures

• Generally accepted accounting principles

What does the Business Entity Concept state?

• Business affairs are separate from personal activities

• Business and personal affairs are the same

• Business affairs are secondary to personal activities

What does the Going Concern Concept imply?

• the business will operate only during the peak season

• The business will close soon

• The business will continue for the foreseeable future

objectivity in accounting concepts mean

• being factual & verifiable

• using my own opinions

• weighing the best option and using that one.

For every debit entry there must be an opposite and equal credit entry is stated by which concept?

• Business entity concept

• Prudence concept

• Dual aspect concept

What does the Accrual Concept state?

• Expenses and revenues are recorded when earned or incurred

• Expenses and revenues are recorded when paid or received

• Expenses are recorded at the end of the year

Which concept states that we should be conservative?

• revenue concept

• prudence concept

• going concern concept

what is another name for the accrual concept?

• the objective concept

• Matching concept

• Conservative concept