Accounting principles and concepts

Multiple choice questions quiz

According to accrual concept of accounting, financial or business transaction is recorded:

The John Marketing Company provides advertising services to an investment company in year A but receives advertising fee in year B. The John Marketing Company recognizes this revenue in year A. This action of John Marketing Company is justified by:

A company is a going concern if:

Which accounting concept or principle states that the transactions of a business must be recorded separately from those of its owners or other businesses?

The business or economic entity concept is applicable to:

Which of the following states that the dollar does not lose its value:

Which of the following states that a transaction is not recorded in the books of accounts unless it is measurable in terms of money?

Which one of the following states that the life of a business can be divided into equal time periods?

The revenue is not recognized until it is earned and realized or at least realizable. To which accounting principle/concept this statement belongs?

Sony, a multinational electronics corporation, rounds dollar amounts in its financial statements to the nearest $1,000. Which accounting principle/concept justifies this action?

The auditor noticed that the financial statements of Meta Company were missing some footnotes important for users for decision making. This action of the management is a violation of:

A fixed asset costing $30,000 is depreciated over its estimated useful life of 15 years. This action is related to:

In certain situations, companies might recognize losses but not gains. This action belongs to:

The Modern Enterprises reported all assets in the balance sheet at current market value. This action is a violation of:

Which accounting principle/concept allows accountants to ignore other accounting principle/concept if the amount in question is immaterial?

Which of the following is taken into account While determining the materiality of an amount?