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QUESTIONS ( click here for ANSWER) |
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1. |
Accounting Principle is general law or rule followed in the preparation of financial statements |
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2. |
Usefulness, objectivity and feasibility are the three basic norms generally found in accounting principles |
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3. |
The entity concept considers the business and the proprietor as distinct from each other |
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4. |
In accountancy, all business transactions are recorded as having dual aspect |
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5. |
It is on the basis of going concern concept that the asset are always valued at market value |
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X |
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6. |
Since the life of the business is assumed to be indefinite, the financial statement of the business should be prepare only when it goes into liquidation |
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X |
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7. |
According to money measurement concept, the efficiency of the top management of the business must be clearly recorded in the books of accounts |
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X |
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8. |
According to periodic matching of cost and revenue concept, a business man is not only to measure revenues in a particular accounting period but also has to calculate expenses which can be assigned in earning such revenues |
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9. |
Cash basis considers the revenue as realized when the goods are produced |
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X |
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10. |
The losses from sale of capital assets need not be deducted from revenue to ascertain the net income |
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X |
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11. |
The convention of disclosure implies that all material information should be disclosed in the accounts |
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12. |
In keeping with the principle of materiality, important items must be recorded instead of being left out or merged with other items |
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13. |
The comparison of the results of one accounting period with that in the past is possible when the convention of consistency is adhered to by the business |
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14. |
The convention of conservation takes into account all prospective profits and all prospective losses. |
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