Unit3

. Accounting principles are the essential guidelines under which ................. prepare their financial statements

• business

• banks 

• . businesses

• . auditors

These principles guide the methods and decisions for a business over a short and ................. term.

• . big

• . long                     

• small

• high

. For both internal and ................. reporting purposes, it is important to understand the concepts presented below because they serve as a guideline to the analysis of financial reporting issues.

• . external

• . exported

• . imported            

• . extra

. In order to make this language to convey the same meaning to all people, it is necessary that it should be ................. on certain uniform scientifically laid down standards.

• . base

• . based

• . basic

• basically

. The matching concept does not mean that revenues and ................. for a period are equal.

• . income

• . interest               

• capital

• . expenses

. A fair presentation of the results of a firm’s operations during a period of time requires that all expenses incurred in generating that period’s revenues be ................. from the revenues earned

• deducted

• . conducted

• . managed

• . added

Pending lawsuits, ................. transactions, or other conditions may have imminent and significant effects on the company's financial status

• . complete

• . completed

• incomplete

• uncomplete

Footnotes supplement financial statements ................. this information and to describe the policies the company uses to record and report business transactions

• convey 

• conveyed

• conveying

• . to convey

. The financial statement user relies on these concepts and principles related to the accounting period when making ................. and informed decisions about an entity’s financial position and results of operations

• . judge

• . judgements

• . judgement

• judged

Accounting principles are the essential guidelines ................. which businesses prepare their financial statements

• . in                       

• . of

• under

• . for