The revenue from business activities and the expenses associated with earning that revenue are recorded in the same accounting period.

An accounting standard can be ignored if the net impact of doing so has such a small impact on the financial statements that a reader of the financial statements would not be misled.

Only financial business transactions are reported in the book of accounting and must be expressed in numbers that have common values—that is, using a common unit of measurement or currency.

Financial statements are prepared with the expectation that a business will remain in operation indefinitely.

GAAP stands for:

Information is based on actual costs incurred in transactions.

Mr. Philip Pines is the owner of a beauty spa and wellness salon. He bought a residential house and lot which he included in the balance sheet of a beauty spa and wellness salon. This is a violation of what accounting assumption?

The manager of the business wrote on a piece of paper that utility expenses incurred by the business were paid the amount of P2,222. The bookkeeper asked for the invoice evidencing the payment before recording it in journal. What accounting principle is being followed?

On June 25, Galing Repair Shop rendered service to a client for P600. The service fee was collected July 4. The bookkeeper recorded the revenue on July 4. Is the bookkeeper following the Revenue Recognition Principle?

Bilis Computer Shop purchased P200 worth of stapler. The useful life of the stapler is 5 years. The accountant expense the entire cost of P200 in the year it is purchased. What principle is being followed?

Mrs. Do has personal properties amounting to P3 million pesos. One half of this was invested in the business called Do Laundry Shop and the other half in another business called Do Convenience Store. Two financial reports were prepared by the accountant, one for each business. Is the accountant following the Economic Entity Assumption?

The accounting guideline that requires financial statement information to be supported by independent, unbiased evidence other than someone's belief or opinion is the:

Financial statements are to be divided into specific time intervals.

According to accrual concept of accounting, financial or business transaction is recorded: