Accounting Concepts

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

Concept: Financial information is reported for a specific period of time on financial statements.

• Matching Expenses with Revenue
• Accounting Period Cycle
• Business Entity

Concept: a business's records should never be mixed with an owner's personal records and reports

• adequate disclosure

• business entity

• objective evidence

• going concern

Concept: When a business activity is large enough to impact business decisions, it should be recorded clearly in the financial statements

• realization of revenue

• materiality

• unit of measurement

• consistent reporting

Concept: Financial statements are prepared with the expectation that business will remain in operation indefinately

• going concern

• materiality

• accounting period cycle

• matching revenue with expenses

Concept: The same accounting procedures must be followed in the same way each accounting period

• accounting period cycle

• objective evidence

• consistent reporting

• materiality

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

• adequate disclosure

• unit of measurement

• historical cost

• matching expenses with revenue

Financial Statements of a firm are prepared every year on 31st March, according to which concept?

• Money Measurement

• Revenue Recognition

• Materiality

• Accounting Period

Purchase of pen is treated as a revenue expense, according to the concept of

• Objectivity

• Materiality

• Cost

• Accounting Period

If one aspect of a transaction is not recorded, which accounting concept is violated?

• Cost

• Business Entity

• Matching

• Dual Aspect.