Accounting Principles PopQuiz

Ali owns a bakery, but he records only business transactions and does not mix them with his personal expenses. Which accounting principle is applied?

• Matching Concept

• Entity Concept

• Cost Concept

• Consistency Concept

A company records only transactions that can be measured in money and does not record employee skills or brand reputation. This follows the:

• Prudence Concept

• Cost Concept

• Monetary Concept

• Going-Concern Concept

ABC Sdn Bhd purchased land 10 years ago for RM1 million. Even though its current market value is RM3 million, it is still recorded at RM1 million. Which principle applies?

• Fair Value Concept

• Cost Concept

• Materiality Concept

• Matching Concept

XYZ Sdn Bhd continues to prepare financial statements as if it will operate indefinitely, despite short-term losses. This is an application of the:

• Matching Concept

• Going-Concern Concept

• Prudence Concept

• Materiality Concept

A company prepares financial statements every quarter and annually to provide updated financial reports. This applies to which principle?

• Periodicity Concept

• Fair Value Concept

• Prudence Concept

• Consistency Concept

XYZ Sdn Bhd pays RM100,000 in December for November salaries. The expense is recorded in November, when the employees worked. Which concept is followed?

• Prudence Concept

• Matching Concept

• Consistency Concept

• Entity Concept

When a company sells goods on credit for RM10,000, it records: Debit: Accounts Receivable (+RM10,000) Credit: Sales Revenue (+RM10,000) Which principle does this follow?

• Periodicity Concept

• Double-Entry Concept

• Fair Value Concept

• Materiality Concept

A company estimates that a customer may not repay a RM5,000 loan and records an expected loss in advance. This is an example of:

• Prudence Concept

• Consistency Concept

• Cost Concept

• Periodicity Concept

A company has been using FIFO for inventory valuation for five years. If it wants to switch to LIFO, it must justify the change. Which principle applies?

• Entity Concept

• Prudence Concept

• Consistency Concept

• Materiality Concept

A company records an RM10 error in petty cash but does not correct it because it is insignificant. This follows the:

• Matching Concept

• Prudence Concept

• Materiality Concept

• Fair Value Concept