Principle of accounting

Question 1. Listed below are some characteristics of financial information. 

1 Relevance 

2 Consistency 

3 Faithful representation 

4 Accuracy 

Which of these are qualitative characteristics of financial information according to the IASB's Conceptual Framework for Financial Reporting? 

• A. 1 and 3 only

  
  

• B. 1 and 2 only 

  
  

• C. 3 and 4 only 

  
  

• D. 2 and 4 only 

  
  

Question 2. Which one of the following is not a qualitative characteristic of financial information according to the Conceptual framework for Financial Reporting? 

• A. Faithful representation 

  
  

• B. Relevance 

  
  

• C. Timeliness 

  
  

• D. Accruals

  
  

 According to__________ accounting concepts, while preparing accounts we anticipate losses.

• A. Conservatism

  
  

• B. Materiality.

• C. Objectivity  

  
  

• D. None of the above

  
  

According to the IASB's Conceptual Framework for Financial Reporting, which TWO of the following are part of faithful representation? 

1 It is neutral 

2 It is relevant 

3 It is presented fairly 

4 It is free from material error 

• A. 1 and 2 

  
  

• B. 1 and 4 

  
  

• C. 3 and 4

  
  

• D. 2 and 3 

  
  

Users of accounting information include?

• A. Suppliers 

  
  

• B. Customers. 

  
  

• C. Government agencies 

  
  

• D. All the answers above

  
  

Which accounting concept should be considered if the owner of a business takes goods from inventory for his own personal use? 

• A. The fair presentation concep

• B. The accruals concept

• C. The going concern concept

• D. The business entity concept

All of the following items are classifieds as fundamental accounting assumptions except.

• A. Consistency

• B. Accruals

  
  

• C. Business entity 

  
  

• D. None of these

  
  

Purposes of an accounting system include all the following except.

• A. Dictate the specific types of business enterprise transactions that the enterprises may engage in

• B. Classify the effects of transactions to facilitate the prepration of reports

• C. Interpret and record the effects of business transaction

• D. All of above

All of the following are functions of Managerial Accounting except.

• A. Decision making

• B. Forecasting

• C. Ledger posting 🡪 Financial Accounting

• D. All of above

Which of the following statements is incorrect?

• A Liabilities + Assets = Capital

• B Assets – Liabilities = Capital

• C Liabilities + Capital = Assets

• D Assets - Capital = Liabilities