Accounting Principles and Financial Statements

Jeff's Construction, LLC bought a piece of equipment in 2001 for P 10,000. Today this piece of equipment is only worth P 2,000. Jeff would still report the equipment at its purchase price of P 10,000, less depreciation, even though its current fair market value is only P 2,000.

• Historical Principle
• Business Entity
• Accrual Principle
• Adequate Disclosure Principle

A firm sells goods for P 55, 000 on 25th March 2005 and the payment is not received until 10th April 2005, the amount is due and payable to the firm on the date of sale i.e. 25th March 2005.

• Periodicity Principle
• Consistency
• Accrual Principle
• Adequate Disclosure Principle

Which principle/guideline requires the company's financial statements to have footnotes containing information that is important to users of the financial statements?

• Historical Principle
• Business Entity
• Accrual Principle
• Adequate disclosure Principle

The personal assets of the owner of a company will not appear on the company's balance sheet because of which principle/guideline?

• Historical Principle
• Business Entity
• Accrual Principle
• Adequate disclosure Principle

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
• Objectivity principle

All business transactions that will be entered in the accounting records must be duly supported by verifiable documents. This principle pertains to..

• Historical Principle
• Business Entity
• Periodicity Principle
• Objectivity principle

Providing financial accounting information about economic activities for specified time/accounting periods.. This principle pertains to..

• Accrual Principle
• Business Entity
• Periodicity Principle
• Objectivity principle

It is a measurement of financial position of the company.

• Income Statement
• Balance Sheet
• Cash Flow Statement
• Adequate disclosure Principle

It is a measurement of performance (shows the profit or loss) of the company.

• Income Statement
• Balance Sheet
• Cash Flow Statement
• Statement of Owner's Equity

It is a measurement of changes in financial position of the company.

• Income Statement
• Balance Sheet
• Cash Flow Statement
• Statement of Owner's Equity