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- 1. Multiple Choice
The accounting period of a business is separated into activitiess that help the business keep its accounting records in an orderly fashion.
Accounting Period Cycle
Source Document
Fiscal Year
None of the Above
- 2. Multiple ChoiceJeff's Construction, LLC bought a piece of equipment in 2001 for P 10,000. Today this piece of equipment is only worth P 2,000. Jeff would still report the equipment at its purchase price of P 10,000, less depreciation, even though its current fair market value is only P 2,000.Historical PrincipleBusiness EntityAccrual PrincipleAdequate Disclosure Principle
- 3. Multiple ChoiceWhich principle/guideline requires the company's financial statements to have footnotes containing information that is important to users of the financial statements?Historical PrincipleBusiness EntityAccrual PrincipleAdequate disclosure Principle
- 4. Multiple ChoiceConcept: Financial information is reported for a specific period of time on financial statements.Matching Expenses with RevenueAccounting Period CycleBusiness Entity
- 5. Multiple Choice
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
- 6. Multiple Choice
Concept: When a source document is prepared for each transaction
going concern
materiality
realization of revenue
objective evidence
- 7. Multiple Choice
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
- 8. Multiple Choice
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
- 9. Multiple Choice
Concept: The same accounting procedures must be followed in the same way each accounting period
accounting period cycle
objective evidence
consistent reporting
materiality
- 10. Multiple Choice
Concept: Revenue is recorded at the same time goods or services are sold.
realization of revenue
the revenue principle
going concern
historical cost
- 11. Multiple Choice
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
- 12. Multiple Choice
Concept: Business transactions are reported in numbers that have common values. Meaning all reporting should be done in terms of money
Unit of measurement
historical cost
materiality
matching expenses with revenue
- 13. Multiple Choice
Concept: The actual amount paid for merchandise or other items purchased is recorded, even though the value of the asset may be different
unit of measurement
historical cost
matching expenses with revenue
consistent reporting
- 14. Multiple ChoiceWhen preparing Financial Statements which monetary measurement basis states that the accounting records should be based on the original cost of the transaction.Current ValueReplacement ValueRealisation ValueHistorical Cost
- 15. Multiple ChoiceThe Matching Concept states that revenue should only be recognised when it is earned and not received. If a company sells goods on credit in March and receives payment in May, this would be shown in the sales figure for?The month the goods were sold.The month the goods were produced.The month the cash is creceived from the customer.None of the above.
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