Principles of Accounts Quiz

Maria is considering using her personal funds to cover expenses for her side business. Which accounting principle is she potentially disregarding?

• Accrual basis

• Business Entity

• Consistency

• Matching principle

The business has made huge profits and wants to expand next year. Which accounting convention covers this piece of news?

• Materiality

• Consistency

• Conservatism

• Going Concern

The accounting principle that requires expenses to be recorded in the same period as the income they are associated with is known as:

• Accrual basis

• Matching principle

• Cost principle

• Materiality

The second step in the accounting cycle is:

• Recording transactions

• Posting to the ledger

• Preparing financial statements

• Identifying transactions

The Trial balance is prepared to check:

• balances

• accuracy of transactions

• check revenues and expenses

• Prepare for the closing process

The financial statement that shows a company's financial position at a specific point in time is:

• Income statement

• Statement of retained earnings

• Balance sheet

• Statement of cash flows

What is another term for the statement of financial position?

• Profit and loss statement

• Financial summary

• Cash flow statement

• Balance sheet

What are ethics?

• A set of laws governing behaviour

• Morals governing human behaviour

• Professional guidelines for accountants

• Cultural norms

The ethical principle that requires accountants to be honest and truthful in their work is:

• Integrity

• Objectivity

• Competence

• Professionalism

Conflict of interest arises when:

• An accountant has a personal interest that could influence their professional judgment

• An accountant makes an error in their work

• An accountant fails to follow generally accepted accounting principles

• An accountant discloses confidential information to a third party