16 Questions
What do accounting standards emphasize more on, according to the text?
Neutrality
How are non-current assets disclosed according to the Cost concept?
At cost less depreciation less any impairment
What is the purpose of depreciation for assets like Machinery or Office furniture?
To write off every year due to diminishing value
Under the Money measurement concept, what is excluded from being measured?
Items that can't be measured in monetary terms
What is a conservative approach towards recording investment type assets?
Recording at market value
What is the definition of the business entity concept?
All of the above
According to the realization concept, when is income recognized?
When the customer buys the product on account
What is the definition of the accrual concept?
Both a and c
What is an example of the accrual concept?
Company A pays R30,000 rentals for Feb, March and April on 1 Feb 2014, with a year-end of 31 March
What is the definition of goodwill?
All of the above
According to the matching concept, which of the following statements is true?
Income and expenses should be disclosed in the same Income Statement when earned or incurred
What does the dual aspect concept form the basis for?
Double-entry bookkeeping
According to the materiality principle, when should an issue be disclosed?
Only if the issue would add to the reader's understanding of the business
Which of the following statements best describes the prudence concept?
Assets and profits should be reported at the lowest reasonable figure, while liabilities and expenses should be reported at the highest reasonable figure
What is the assumption behind the going concern concept?
The business will continue in operational existence for at least the next 12 months
What should be disclosed when there is a change to accounting policies?
The change should be disclosed, and the impact should be explained
This quiz covers the introduction to accounting standards, focusing on IAS 1 Presentation of accounting statements and IAS 8 Accounting policies. Topics include accounting concepts, neutrality versus prudence, fair value, and the cost concept for non-current assets.
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