Accounting Concept

The accounting principle that states companies and owners should be account for separately:

• Economic entity

• Historical cost

• Going concern

• Revenue recognition

Assets are recorded at their original purchase price according to the

• fair value measurement

• historical cost

• monetary measurement

• consistency

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…..

• expense recognition

• monetary measurement

• historical cost

• materiality

Dr. Roshidah, a specialist doctor, has given a treatment to her patients in June. Her patient promised to pay the cost of the treatment in July. Dr. Roshidah recorded the services revenue in her business book on June.

• Expense recognition

• Consistency

• Revenue recognition

• Going concern

Mr. Ahmad is a wholesaler of plastic goods. In the financial year 2019, Mr. Ahmad decided to change the depreciation method from the straight-line method to the declining balance method.

• Expense recognition

• Consistency

• Revenue recognition

• Going concern

Linah & Co. bought a building worth RM500,000 with expected usage life of 20 years. The accountant of the company recommends that the building to be depreciated for a period of 15 years, as the company is expected to operate within that period only.

• Expense recognition

• Consistency

• Revenue recognition

• Going concern

Perniagaan Naval purchased a total of RM135,000 investments on 1 January 2019. The investment market value has decreased in October 2019 to RM115,000. Accordingly, the business reported a value of RM115,000 as a total investment in the Statement of Financial Position on 31 December 2019.

• Fair value measurement

• Consistency

• Revenue recognition

• Going concern

Mr. Abu Nawaz always ask an evidence of transaction which is managed by his assistant.

• Fair value measurement

• Objectivity

• Revenue recognition

• Going concern

Mr Alimiad owns land, vehicle and investment which are his personal high value properties. He records these assets in his business book.

• Economic entity

• Objectivity

• Revenue recognition

• Going concern

Financial Statement must be prepared in a specific periods such as months, quarters and years to enable comparison of business performance over time.

• Economic entity

• Objectivity

• Accounting-period

• Going concern