Q.N Indicate whether the following are true or false 1. Accounting Principle is general law or rule followed in the preparation of financial statements 2. Usefulness, objectivity and feasibility are the three basic norms generally found in accounting principles 3. The entity concept considers the business and the proprietor as distinct from each other 4. In accountancy, all business transactions are recorded as having dual aspect 5. It is on the basis of going concern concept that the asset are always valued at market value 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 7. According to money measurement concept, the efficiency of the top management of the business must be clearly recorded in the books of accounts 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 9. Cash basis considers the revenue as realized when the goods are produced 10 The losses from sale of capital assets need not be deducted from revenue to ascertain the net income 11 The convention of disclosure implies that all material information should be disclosed in the accounts 12 In keeping with the principle of materiality, important items must be recorded instead of being left out or merged with other items 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 14 The convention of conservation takes into account all prospective profits and all prospective losses.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Q.N Indicate whether the following are true or false 1. Accounting Principle is general law or rule followed in the preparation of financial statements 2. Usefulness, objectivity and feasibility are the three basic norms generally found in accounting principles 3. The entity concept considers the business and the proprietor as distinct from each other 4. In accountancy, all business transactions are recorded as having dual aspect 5. It is on the basis of going concern concept that the asset are always valued at market value 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 7. According to money measurement concept, the efficiency of the top management of the business must be clearly recorded in the books of accounts 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 9. Cash basis considers the revenue as realized when the goods are produced 10 The losses from sale of capital assets need not be deducted from revenue to ascertain the net income 11 The convention of disclosure implies that all material information should be disclosed in the accounts 12 In keeping with the principle of materiality, important items must be recorded instead of being left out or merged with other items 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 14 The convention of conservation takes into account all prospective profits and all prospective losses.

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