Accounting Principles Quiz

Azaf, a trader, records assets in his ledger using the price he paid for them. Which accounting principle is he applying?

• prudence

• materiality

• matching

• historic cost

A restaurant owner made no entry in her accounts when the business received a good rating from a customer. Which accounting principle was applied?

• money measurement

• historic cost

• going concern

• realisation

Azaf is an accountant. When he prepares financial statements he makes sure that they are clearly presented and he assumes that the users of these statements will have a reasonable knowledge of accounting. Which accounting policy is Azaf is applying?

• comparability

• relevance

• reliability

• understandability

Which accounting policy requires that the information in financial statements is useful for making financial decisions for the future?

• comparability

• money measurement

• relevance

• reliability

Jamie is the owner of a business. Jack opens up a rival business in the same town as Jamie. Jamie knows that this will affect his sales but did not record this in his accounting records. Which accounting principle is Jamie applying?

• consistency

• duality

• money measurement

• prudence

Each year, Mariam uses the reducing balance method to depreciate her vehicles. Which accounting principle is Mariam observing?

• consistency

• duality

• historic cost

• realisation

An ice cream business purchases a cheap calculator during the financial year. Why would the ice cream business not include the value of the calculator in the statement of financial position?

• It was unused.

• It was used regularly.

• It was of very low monetary value.

• It was purchased using cash.

Sofia, a credit customer of a trader, is unable to pay their invoice. The trader decides to write off the balance as an irrecoverable debt. The trader makes a credit entry in Sofia's account and a debit entry in the irrecoverable debts account. Which accounting principles are being applied?

• duality and realisation

• duality and prudence

• prudence and realisation

• historic cost and matching

A business withdraws $5 000 from the business bank account to buy a vehicle for personal use. In the ledger, a debit entry was made in the drawings account and a credit entry was made in the bank account. Which accounting principles were being applied?

• prudence and duality

• duality and business entity

• business entity and matching

• matching and prudence

Halina started a business and transferred $10 000 from her personal bank account into a business bank account. This transaction was debited to the business bank account and credited to the capital account. Which accounting principles did she apply?

• duality and business entity

• going concern and business entity

• duality and materiality

• going concern and materiality