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Questions and Answers
What is the main purpose of accounting concepts in financial accounting?
What is the main purpose of accounting concepts in financial accounting?
- To lay down the basis of preparation of financial statements (correct)
- To increase the market value of assets recorded
- To allow accountants to use their personal judgment
- To complicate the process of preparing financial accounts
How are assets recorded in financial accounting?
How are assets recorded in financial accounting?
- At market value
- At open market value
- At cost (correct)
- At historical value
Which accounting assumption is related to valuing assets at cost?
Which accounting assumption is related to valuing assets at cost?
- Cost concept (correct)
- Going concern concept
- Double entry concept
- Relevance concept
How does the double entry concept view financial transactions?
How does the double entry concept view financial transactions?
What does the Going Concern Concept assume about a business?
What does the Going Concern Concept assume about a business?
How are assets valued under the Going Concern Concept?
How are assets valued under the Going Concern Concept?
What is the purpose of the matching concept in accounting?
What is the purpose of the matching concept in accounting?
In the context of financial statements, what does the consistency concept require of accountants?
In the context of financial statements, what does the consistency concept require of accountants?
What does the Money Measurement Concept imply about expressing assets and liabilities?
What does the Money Measurement Concept imply about expressing assets and liabilities?
When does an expense become an accrued expense?
When does an expense become an accrued expense?
How are prepayments handled according to the matching concept?
How are prepayments handled according to the matching concept?
How do accountants handle changes in accounting methods or policies according to the consistency concept?
How do accountants handle changes in accounting methods or policies according to the consistency concept?
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