Podcast
Questions and Answers
What does the Going Concern Concept in Accounting assume?
What does the Going Concern Concept in Accounting assume?
- The business will continue to exist for a long period of time. (correct)
- The business will cease operations soon.
- The business will change its name frequently.
- The business will only exist for a specific financial year.
In the Substance over Form concept in Accounting, what is preferred?
In the Substance over Form concept in Accounting, what is preferred?
- Formal view
- Theoretical view
- Legal view
- Practical view (correct)
What is an example of substance over form in Accounting?
What is an example of substance over form in Accounting?
- Ignoring financial regulations.
- Selling a product without a license.
- A machine bought on hire purchase being shown as a fixed asset. (correct)
- Not recording any transactions.
When should final accounts be drawn up according to the Going Concern Concept?
When should final accounts be drawn up according to the Going Concern Concept?
How does the Going Concern Concept impact decision-making in Accounting?
How does the Going Concern Concept impact decision-making in Accounting?
Which accounting principle states that financial information should be free from significant errors, bias, and independently verified?
Which accounting principle states that financial information should be free from significant errors, bias, and independently verified?
Who uses the financial statements to decide whether to provide a company with a loan?
Who uses the financial statements to decide whether to provide a company with a loan?
What is the main reason for drafting financial statements in a common format?
What is the main reason for drafting financial statements in a common format?
Which of the following is NOT an accounting principle for preparing consistent financial statements?
Which of the following is NOT an accounting principle for preparing consistent financial statements?
Who would refer to the income statement and balance sheet to know the profit of a business?
Who would refer to the income statement and balance sheet to know the profit of a business?
What characteristic must financial information have to be considered relevant according to accounting principles?
What characteristic must financial information have to be considered relevant according to accounting principles?
According to the concept of Realisation Concept, when are profits considered realized?
According to the concept of Realisation Concept, when are profits considered realized?
Which accounting concept dictates that only transactions expressible in monetary terms are to be recorded?
Which accounting concept dictates that only transactions expressible in monetary terms are to be recorded?
In accounting, the Dual Aspect Concept dictates that every transaction affects how many items?
In accounting, the Dual Aspect Concept dictates that every transaction affects how many items?
Under the Business Entity Concept, whose transactions should be recorded?
Under the Business Entity Concept, whose transactions should be recorded?
According to the Historic Cost Concept, at what value are transactions recorded?
According to the Historic Cost Concept, at what value are transactions recorded?
'Profits are realized when a customer takes ownership of the good or service regardless of whether money is received straight away' - which concept does this statement align with?
'Profits are realized when a customer takes ownership of the good or service regardless of whether money is received straight away' - which concept does this statement align with?
What concept ensures that transactions of a similar nature should always be recorded in a consistent way?
What concept ensures that transactions of a similar nature should always be recorded in a consistent way?
Which concept states that you should not waste time recording trivial transactions involving very small amounts of money?
Which concept states that you should not waste time recording trivial transactions involving very small amounts of money?
What concept dictates that only the income earned and expenses incurred in the current financial year should be included in the Trading and Profit and Loss Account?
What concept dictates that only the income earned and expenses incurred in the current financial year should be included in the Trading and Profit and Loss Account?
Which concept ensures that profits are not overstated and assets are not shown to be too high?
Which concept ensures that profits are not overstated and assets are not shown to be too high?
What is the main purpose of the Consistency Concept?
What is the main purpose of the Consistency Concept?
Which concept suggests that what is trivial for a large business could be material for a small business?
Which concept suggests that what is trivial for a large business could be material for a small business?
