Accounting Concepts, Capital & Revenue Expenditure

Which accounting principle differentiates between owners and management?

• Going Concern

• Dual Aspect

• Separate Entity

• Conservatism

An accounting concept according to which all relatively important and relevant items are disclosed in the financial statements is:

• Materiality

• Going concern

• Accrual concept

• Matching

Which convention is also known as the doctrine of prudence?

• consistency

• full disclosure

• Conservatism

• Money measurement

According to which of the following concepts, for determining the net income from business, all costs which are applicable to the revenue of the period should be charged against that revenue?

• Matching concept

• Cost concept

• Money measurement concept

• Dual aspect concept

Accounting rules, practices and conventions should be observed continuously and applied:

• Convention of consistency

• Convention of full disclosure

• Convention of Conservatism

• Convention of materiality

The concept of conservatism will have the effect of:

• Over-statement of assets

• Understatement of assets

• Understatement of provision for bad and doubtful debts

• Overstatement of inventory

The concept of conservatism takes into account:

• All future profits and all future losses

• All future profits but leaves all future losses

• All future losses but leaves all future profits

• All of the above

According to the concept of conservatism, the stock in trade is valued at:

• Market price

• Cost price

• Market price or cost price, whichever is lower

• Market price or cost price, whichever is lower

Revenue is considered as being earned on the date at which it is realised:

• Money measurement concept

• Realisation concept

• Dual aspect concept

• Accounting Period Concept

According to which of the following concepts, even the proprietor of the business is treated as a creditor of the business?

• Money measurement concept

• Cost concept

• Dual aspect concept

• Business Entity concept