The accounting entity concept states that each entity Question 1 5 Select one: A . cannot reasonably report all of its activities in financial statements. B . cannot distinguish events of the business from its owners C . can be separately identified and accounted for D . None of the options E . will remain in operation for the foreseeable future

The accounting entity concept states that each entity Question 1 5 Select one: A . cannot reasonably report all of its activities in financial statements. B . cannot distinguish events of the business from its owners C . can be separately identified and accounted for D . None of the options E . will remain in operation for the foreseeable future

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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Which of the following is an assumption made in the preparation of the financial statements? Select one: a. The current market value is assumed to be less relevant than the original cost paid. b. Financial statements are prepared for a specific entity that is distinct from the entity's owners. c. The preparation of financial statements for a specific time period assumes that the balance sheet covers a designated period of time. d. Financial statements are prepared assuming that inflation
1) Which of the following options is correct in relation to accounting equation? Select one: a. Assets + Liabilities= Equity b. Assets + Equity = Liabilities c. None of the options d. Assets= Liabilities + Equity
Which of the following concepts states that a business will continue its operations for the foreseeable future and the company will not be forced to liquidate in the near future? a. Accrual basis b. Materiality c. Consistency concept d. Going concern
Which of the following statements about the process of developing a reformulated Balance Sheet is NOT correct? O 1. Derivative financial liabilities should be classified as financial obligations O 2. Lease interest should be classified as a financial expense O 3. Preference shares should be classified as a financial obligation O 4. Every asset can be clearly classified as an operating asset or financial asset. There is no judgement or uncertainty involved
Which of the basic financial statements is best used to answer the question, "How profitable is the business?" a. Income statement O b. Statement of shareholder's equity O c. Accounts receivable aging schedule O d. Balance sheet
True or False Question 1. The Comparabilty concept in accounting means different companies use similar accounting principles.
29. Which statement is false? a. The balance sheet of an entity purports to show the true value of the entity b. The balance sheet should show a company's liquidity c. The balance sheet reflects the financial capital of a company d. The balance sheet summarizes the financial position of an entity at a point in time
Which of the following statements is a usefulness of the income statement? A. Evaluate the past performance of the enterprise. O B. Income measurement involves judgment. OC Items that cannot be measured reliably are not reported. O D. Income numbers are affected by the accounting methods employed.
Q. 5 Identify and mention Accounting Concepts and Conventions for the below statements. 1. There is neither the intention nor the necessity to liquidate the particular business venture in the foreseeable future. 2. The personal assets of the owners or shareholders are not considered while recording and reporting the assets of the business entity. 3. The fixed asset will be recorded at cost at the time of its purchase but may systematically reduce its value by charging depreciation. 4. The principle of valuing the stock at cost or market price whichever is lower should be followed year after year to get comparable results. 5. The accountant should not anticipate income and should provide for all possible losses. 6. The decision of whether the transaction is material or not should be made by the accountant on the basis professional experience and judgment.
Question 10 Accrual basis accounting means that transactions that change a company's financial statements are recorded in the periods in which the events occur. A. True B. False C. need more information to answer this question. D. all of the given answers are wrong.
Options are: General Accounting principle Revenue recongnition principle Full disclosure principle Buisnmess entity assumption Going concern assumption
The business entity assumption is important because O a. it requires that the company record all of its economic transactions in accordance with GAAP. O b. it limits economic data in the accounting system to data directly related to the activities of the business. O c. it limits the amount that a company can record for its transactions in the accounting records. O d. it requires that all transactions be recorded in the period in which they occur.