Accounting Concepts

Which accounting concept assumes that a business will continue to operate indefinitely?

• Going Concern Concept

• Consistency Concept

• Accrual Concept

• Conservatism Concept

The process of transferring entries from the journal to the ledger is called:

• Posting

• Journalizing

• Balancing

• Summarizing

Outstanding expenses are:

• Prepaid Expenses

• Accrued Expenses

• Deferred Expenses

• None of the above

The trial balance is prepared to:

• Record transactions

• Prepare financial statements

• Check the arithmetical accuracy of ledger accounts

• None of the above

Which of the following is not a component of the cash flow statement?

• Operating Activities

• Investing Activities

• Financing Activities

• Marketing Activities

The matching principle requires:

• Expenses to be matched with revenues

• Assets to be matched with liabilities

• Income to be matched with expenses

• None of the above

Which of the following is a contingent liability?

• Outstanding Salary

• Bills Payable

• Bank Guarantee

The amount invested by the owner in the business is called:

• Liability

• Asset

• Capital

• Revenue

The principle of conservatism states:

• Anticipate profits and not losses

• Anticipate losses and not profits

• Record all revenues and ignore expenses

• None of the above

Which of the following errors will not affect the trial balance?

• Errors of Omission

• Errors of Commission

• Compensating Errors

• All of the above