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WorksheetsChapter 10 Accounting principles
Total questions: 20
Worksheet time: 10mins
Switching accounting principles every year would violate the
money measurement principle
consistency principle
Concept of consistency means :
all the firm in the same industry should be identical accounting principles and procedures
all principle and procedures of accounting are utilised
accounting principles and methods should remain consistent from one year to another
all of the above
The cost of a small calculator is accounted as an expense and not shown as an asset in financial statement of a business entity due to…..
materiality concept
matching concept
historic cost concept
principle of full disclosure
All properties and services acquired by the business must be recorded at their original acquisition cost. This principle pertains to..
Historical Principle
Business Entity
Accrual Principle
Materiality principle
Name the convention that states closing stock is valued at cost price or market price which ever is lower.
Historic cost
Prudence
Money measurement
Accrual
According to the accrual concept of accounting, financial or business transaction is recorded
when cash is received or paid
when transaction occurs
when profit is computed
when balance sheet is prepared
The business or economic entity concept is applicable to
sole proprietorship form of business
partnership form of business
corporate form of business
all of the above
One of the following is an example of materiality concept:
Purchase of pencil recorded as an expense instead of including in stock
Purchase of car for private use
Purchase of plant for business
Purchase of building to extend the business
Assets are recorded at their original purchase price according to the:
Materility
Historic Cost
Business Entity
Going Concern
When is accounting information relevant ?
when it can be compared with information for other periods
when it can be understood by the users of the accounts
when it changes business decisions
when it is free from error and bias
Financial statements must be free from error and bias. which account policy is being applied ?
comparability
relevance
reliability
understandability
The understandability concept of accounting states that
Accounting professionals must understand financial statements
End users must understand financial statements
Shareholders must understand financial statements
The comparison of financial statement of one year with that of another is possible only when ----------------concept is followed
Going concern
Accrual
Consistency
Materiality
According to money measurement concept, the efficiency of the top management of the business must be clearly recorded in the books of accounts
True
False
The Revenue recognition concept determines when goods sent on credit to customers are to be included in the sales figure for the purpose of computing the profit or loss for the accounting period. which of the following tends to be used in practice to determine when to include a transaction in the sales figure for the period. When the goods have been :
dispatched
invoiced
delivered
paid for
As per Going Concern Concept business will continue to exist:
For a limited period
for 10 years
for 25 years
for a long period in the future
