Accounting Principles Overview Quiz

Rules, procedures, and conventions guiding good accounting practices.

Generally Accepted Accounting Principles; standardized accounting rules and guidelines.

Financial Accounting Standards Board, which establishes accounting standards in the U.S.

International Financial Reporting Standards, used globally to ensure uniformity in financial reporting.

United States Generally Accepted Accounting Principles; specific GAAP for U.S. companies.

GAAP ensures consistent financial reporting from year to year.

Public companies must have financial statements audited as per GAAP.

GAAP allows for reasonable comparison of companies' financial statistics.

Characteristics of GAAP include consistency, relevance, reliability, and comparability.

Standardized rules that govern how financial information should be recorded and reported.

Accounting principles and guidelines shape how financial statements are prepared and presented.

Organizations responsible for establishing accounting standards to enhance transparency and consistency.

Accounting principles are adaptable and developed over time, reflecting changes in business practices.

The evolution of accounting principles is ongoing to reflect the needs of society.

This principle states that a business's activities can be divided into small, distinct time intervals for reporting.

The need for accountants to estimate amounts when reporting for shorter time periods.

Assets are recorded at their original cost and are not adjusted for inflation or market value increases.

The amount spent to acquire an asset, which remains unchanged on financial statements.

Important information must be disclosed in financial statements or accompanying notes.

Key policies that govern how a company prepares its financial statements, usually listed as the first note.

Assumes a company will continue to operate indefinitely and meet its obligations.

The process of winding up a company’s financial affairs, selling off assets to pay debts.

American Institute of Certified Public Accountants, a national professional organization for CPAs in the U.S.

Association of Chartered Certified Accountants, a global body for professional accountants based in the UK.

An association representing Certified Public Accountants in Australia, providing professional development and advocacy.

Chartered Institute of Management Accountants, focusing on management accounting and leadership.

Institute of Chartered Accountants in England and Wales, a professional membership organization for accountants.

Chartered Institute of Cost & Management Accountants, focuses on cost management and financial strategy.

The international consultation process to develop International Financial Reporting Standards (IFRSs).

Requires expenses to be recorded in the same period as the revenues they help generate.

Revenues and expenses are recorded when they occur, not when cash is exchanged.

Revenues are recognized when a sale occurs, regardless of cash receipt timing.

Guideline allowing minor violations of principles if the amounts are insignificant.

Expenses should be recorded in the period they were incurred, not when paid.

Should be reported in the period of the related sales, not when paid.

Liabilities must be recognized when expenses are incurred but unpaid.

Principle directing accountants to choose the alternative that yields less income or asset value.

A financial statement showing a company's assets, liabilities, and owner's equity at a specific time.

The practice of expensing low-cost items immediately instead of over their useful life.

The process of adjusting amounts in financial statements to the nearest naira or higher unit.

Requirement to report expected losses on financial statements or notes, but not gains.

Accounting practice of reducing the value of inventory to reflect a lower market value than the original cost.