Accounting Concepts Chapter 2

Which regulatory body in Malaysia is responsible for issuing accounting standards?

• Bank Negara Malaysia

• Securities Commission

• Malaysian Accounting Standards Board (MASB)

• Inland Revenue Board (LHDN)

Which of the following is NOT a characteristic of MFRS?

• Based on IFRS

• Simplified disclosure requirements

• Legally required for public listed companies

• Enhances transparency and comparability

MPERS is most suitable for:

• Government-linked companies

• Public listed companies

• Small and medium-sized private entities

• Non-profit organisations

Which of the following concepts assumes that a business will continue operating in the foreseeable future?

• Historical Cost

• Monetary Measurement

• Going Concern

• Consistency

Under the Historical Cost concept, if an asset was bought for RM15,000 and its market value increased to RM20,000 the next day, what value should be recorded?

• RM20,000

• RM22,500

• RM15,000

• RM5,000

The Prudence concept ensures that:

• Revenues are always estimated

• Liabilities are overstated

• Assets and income are not overstated

• All future profits are recorded early

In the Revenue Recognition concept, revenue is recognised when:

• Cash is received

• Invoice is issued

• Goods are delivered or service is rendered

• Customer signs contract

Which of the following does not affect owner's equity directly?

• Drawings

• Revenues

• Liabilities

• Capital

What is the correct accounting equation?

• Assets + Revenues = Liabilities + Expenses

• Assets = Liabilities + Owner’s Equity

• Owner’s Equity = Assets - Liabilities + Expenses

• Liabilities = Assets + Owner’s Equity

A business received RM3,000 loan from the bank. How will this affect the equation?

• Increase in assets and decrease in equity

• Increase in assets and increase in liabilities

• Increase in liabilities and decrease in equity

• Decrease in liabilities and increase in assets