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Which accounting assumption, principle, information characteristics or constraint most applies to this situation? Personal transactions of the proprietor are distinguished from business transactions.
Which accounting assumption, principle, information characteristics or constraint most applies to this situation? Personal transactions of the proprietor are distinguished from business transactions.
Which accounting assumption, principle, information characteristics or constraint most applies to this situation? A company is a party to major litigation that it may lose and decides not to include the information in the financial statements because it may have a negative impact on the company's share price.
Which accounting assumption, principle, information characteristics or constraint most applies to this situation? A company is a party to major litigation that it may lose and decides not to include the information in the financial statements because it may have a negative impact on the company's share price.
Which accounting assumption, principle, information characteristics or constraint most applies to this situation? The current fair value of the factory building is RM180,000. The company recorded the factory building at the original cost of RM250,000.
Which accounting assumption, principle, information characteristics or constraint most applies to this situation? The current fair value of the factory building is RM180,000. The company recorded the factory building at the original cost of RM250,000.
Which accounting assumption, principle, information characteristics or constraint most applies to this situation? All payments less than RM10 are expensed as incurred.
Which accounting assumption, principle, information characteristics or constraint most applies to this situation? All payments less than RM10 are expensed as incurred.
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Which accounting assumption, principle, information characteristics or constraint most applies to this situation? If a company decides to not report certain data in its financial statements due to the high cost of preparing financial statements.
Which accounting assumption, principle, information characteristics or constraint most applies to this situation? If a company decides to not report certain data in its financial statements due to the high cost of preparing financial statements.
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Which accounting assumption, principle, information characteristics or constraint most applies to this situation? The company employs the same inventory valuation method from period to period.
Which accounting assumption, principle, information characteristics or constraint most applies to this situation? The company employs the same inventory valuation method from period to period.
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Which accounting assumption, principle, information characteristics or constraint most applies to this situation? Rent paid in advance is recorded as prepaid rent.
Which accounting assumption, principle, information characteristics or constraint most applies to this situation? Rent paid in advance is recorded as prepaid rent.
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Which accounting assumption, principle, information characteristics or constraint most applies to this situation? Prepare financial statements at least once a year.
Which accounting assumption, principle, information characteristics or constraint most applies to this situation? Prepare financial statements at least once a year.
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Kwason Bhd has a contract for a special event for Semporna Bhd, where 40% of the contract amount has been paid by Semporna Bhd. This is recorded as RM 30,000 in Kwason Bhd's revenue, which accounting principle is violated here?
Kwason Bhd has a contract for a special event for Semporna Bhd, where 40% of the contract amount has been paid by Semporna Bhd. This is recorded as RM 30,000 in Kwason Bhd's revenue, which accounting principle is violated here?
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Kwason Bhd rents a one-storey building to store their corporate event appliances, the next 12 months of rent is covered by the RM18,000 payment. Kwason Bhd recognized the RM18,000 as an expense. Which accounting principle is violated here?
Kwason Bhd rents a one-storey building to store their corporate event appliances, the next 12 months of rent is covered by the RM18,000 payment. Kwason Bhd recognized the RM18,000 as an expense. Which accounting principle is violated here?
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Kwason Bhd bought a motor vehicle for RM145,000, after two years of use it decided to change the depreciation method from a straight-line basis to a reducing balance method at the rate of 15%. Which accounting principle is violated here?
Kwason Bhd bought a motor vehicle for RM145,000, after two years of use it decided to change the depreciation method from a straight-line basis to a reducing balance method at the rate of 15%. Which accounting principle is violated here?
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Study Notes
Question 1
- Accounting assumptions, principles, information characteristics, and constraints are crucial for accurate financial reporting.
- Separate personal from business transactions.
- Companies may omit certain information if it negatively impacts share price.
- Fair value of an asset may differ from its original cost.
- Minor expenses (under a threshold) are immediately expensed.
- High costs of reporting may lead to omitting data.
- Consistency in inventory valuation methods is important.
- Prepaid rent should be separately recorded.
- Financial statements are required annually.
Question 2
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(a) Corporate Event Planning:
- Kwason Bhd received RM30,000 for a contract.
- 40% (RM12,000) was already paid.
- Kwason Bhd incorrectly recognized the full RM30,000 as revenue.
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(b) Building Rental:
- Kwason Bhd paid RM18,000 for 12 months of rent.
- Kwason Bhd wrongly expensed the entire payment.
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(c) Depreciation Method Change:
- Kwason Bhd changed depreciation method without valid reasons.
- Incorrect application of depreciation policy.
Required
- Identify accounting violations by Kwason Bhd.
- Explain the proper accounting treatment.
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Description
This quiz covers fundamental accounting assumptions, principles, and constraints essential for accurate financial reporting. It explores scenarios involving revenue recognition, expense reporting, and inventory valuation methods, helping learners understand the complexities of accounting practices.
