Key Accounting Principles Quiz

Which accounting principle states that a business's financial transactions should be kept separate from those of its owners or other businesses?

• Going concern principle

• Distinct business entity principle

• Monetary unit principle

• Full disclosure principle

What principle assumes that a business will continue to operate indefinitely, unless there is evidence to the contrary?

• Consistency principle

• Going concern principle

• Materiality principle

• Objectivity principle

Which principle requires that financial statements be prepared using a stable currency?

• Monetary unit principle

• Time period principle

• Cost principle

• Conservatism principle

According to which principle should financial statements be divided into specific time intervals, such as months or years?

• Matching principle

• Time period principle

• Revenue recognition principle

• Full disclosure principle

Which principle dictates that assets should be recorded at their original cost, rather than their current market value?

• Cost principle

• Consistency principle

• Materiality principle

• Objectivity principle

What principle requires that the same accounting methods be used from one period to the next?

• Conservatism principle

• Consistency principle

• Full disclosure principle

• Distinct business entity principle

Which principle states that expenses should be matched with the revenues they help to generate?

• Matching principle

• Revenue recognition principle

• Materiality principle

• Objectivity principle

According to which principle should revenue be recognised when it is earned, regardless of when the cash is received?

• Cost principle

• Revenue recognition principle

• Conservatism principle

• Full disclosure principle

Which principle allows accountants to ignore trivial matters, as long as they do not affect the overall financial statements?

• Materiality principle

• Objectivity principle

• Consistency principle

• Going concern principle

What principle requires that financial information be supported by independent, unbiased evidence?

• Full disclosure principle

• Objectivity principle

• Monetary unit principle

• Time period principle