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Accounting concepts are used in relation to accounting procedures for a specific business enterprise. Some of these are:
Going concern
Verifiable
Accounting period
Accounting entity
Comparable
Historical cost
Accounting equation
Monetary
Prudence
Timeliness
Materiality
Disclosure
For each statement below, select the most appropriate accounting concept or convention (from the list above) and write your answer in the box next to the description. Please note the following:
1
All relevant information and explanations about a business have been included in its financial reports.
2
This concept results from the need to report profit for a particular, arbitrary period of time.
3
It is customary to consider the business enterprise as separate from the personal affairs of the owner so that profit can be determined.
4
This requires understating rather than overstating income and expense amounts that have a degree of uncertainty, so that financial statements do not overstate the company's financial position.
5
Transactions are recorded using the amount paid (or payable) at the time of the transaction.
6
For an accounting record to be made it must be able to be expressed in dollar terms.
7
The treatment of an item in the financial reports of a business depends on its relevance and importance.
8
This concept implies that financial statements do not represent a company's worth if its assets were to be liquidated, but rather that the assets will be used in future operations.
A recent cash budget showed estimated cash receipts of $159,000, estimated cash disbursements of $155,000, and a desired ending cash balance of $6,000, with no borrowing of funds
Reliable information is essential before decision makers can make a sound decision involving the allocation of scarce resources. Accounting information is precious because decision
On January 1, 2012, Magnus Corporation had 60,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred: Mar. 1
What is the implication of applying accounting concepts wrongly
Honolulu Cookie Company provides the following information in order for you to prepare the company's bank reconciliation: Balance per company
What is the implication of applying accounting concepts wrongly?
Q. Example of Income statement of a merchandising firm? To recapitulate the more important relationships in the income statement of a merchandising firm in equation form -
The book of Deven Verma could not be tallied. The account transferred the difference of Rs. 1.270 in the suspense account on the debit side. the following mistakes were found later
Ower invested cash in the company along with equipment at market value, the amount is considered part of capital or revenues?
at the end of May he has a voucher for expenditure of $270 and a balance in hand of $30. explain what the imprest amount is
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