Documente Academic
Documente Profesional
Documente Cultură
ACCOUNTING CONCEPTS
1. Which of the following statements is/are true?
I. Accounting is a service activity intended to fulfill a useful function in society
II. Accounting involves the art of recording, classifying and summarizing
transaction and events, and interpreting the results thereof.
III. Accounting is an art but not a science
IV. Accounting provides quantitative financial information intended to be useful
in making economic decisions
a. I, II, III, IV
b. I, II, III
c. I, II, IV
d. II, III, IV
c. Government Accounting
d. All of the above
15. Money is the best measuring unit of a firms assets, liabilities and equity, as well as
changes therein; its instability is immaterial. This postulate is referred to as
a. Historical cost
c. Money-measuring unit
b. Revenue recognition
d. Fiscal period
16. Cost is normally the proper money measurement of a firms assets, liabilities, and
equity, and changes in them because it is objective, verifiable and convenient to obtain,
approximating value at time of acquisition. This postulate is referred to as
a. Historical cost
c. Money measuring unit
b. Revenue recognition
d. Fiscal period
17. The life of a business firm can be segmented into short run time periods in order to
provide timely financial information to aid in financial decision making; hence, periodic
reporting implies the use of accrual accounting and use of estimates ( approximations)
and informed judgment by accountants. This postulate is referred to as
a. Historical cost
c. Money measuring unit
b. Revenue recognition
d. Fiscal period
18. The point of sale when goods are delivered or services are rendered, is the time at
which revenue is to be recognized. This postulate is referred to as
a. Historical cost
c. Money measuring unit
b. Revenue recognition
d. Fiscal period
19.Goods and services used (expenses) during the fiscal period can be associated with
the revenue earned during the same fiscal period. This postulate referred to as
a. Matching
c. Historical Cost
b. Going concern
d. Specific-separate entity
20. Exception to the application of accounting theory are permitted if the amount
involve is not material; financial reporting is concerned only with information that is
significant enough to affect evaluations or decisions. This convention is called
a. Conservatism
c. Consistency
b. Objectivity
d. Materiality
21. The same accounting procedures for a given entity should be used from one period
to the next. Changes may however be made if it will result in more accurate or useful
information for decision making provided it disclosed. The convention is called
a. Conservatism
c. Consistency
b. Objectivity
d. Materiality
22. Financial statements of different firms should be based on similar accounting
principles and procedures in order to aid users of financial statements in finding
similarities and differences among firms for purposed of financial decision making This
convention is called
a. Consistency
c. Objectivity
b. Comparability
d. Conservatism