Accounting Concepts and Conventions — MCQs

Accounting principles are the _____ rules adopted by accountants for recording transactions.

• Legal

• Arbitrary

• Universally accepted

• Theoretical

The concept that assumes a business will continue for the foreseeable future is the _____ concept.

• Periodicity

• Going Concern

• Realisation

• Cost

The business and its owner are treated as separate entities under which concept?

• Entity

• Dual Aspect

• Cost

• Accrual

Expenses should be matched with revenues of the same period — this is the _____ concept.

• Accrual

• Matching

• Periodicity

• Consistency

Record only transactions measurable in money — explained by which concept?

• Money Measurement

• Dual Aspect

• Realisation

• Cost

Recording an asset at its purchase price rather than market value follows the _____ concept.

• Realisation

• Historical Cost

• Conservatism

• Dual Aspect

The assumption that business life is divided into regular intervals for reporting is the _____ concept.

• Going Concern

• Periodicity

• Consistency

• Realisation

The principle of not anticipating profit but providing for all probable losses is the _____ convention.

• Materiality

• Consistency

• Conservatism

• Disclosure

Omission of paise and showing round figures is based on which convention?

• Materiality

• Conservatism

• Consistency

• Realisation

Same accounting policies must be used every year — this refers to:

• Full Disclosure

• Consistency

• Realisation

• Cost