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6. Inventory valuation

  • Realisation
  • Money measurement
  • Cost
  • Business entity

7. Goods for own use taken by owner

  • Business entity
  • Prudence
  • Materiality
  • Going concern

8. Prudence

  • Where there is doubt, a conservative (lower) figure for profit/assets should be reported.
  • Presumes that the business will continue to trade in the forseeable future.
  • Expenses/incomes for goods and services are matched to the same period.
  • Assets and liabilities are recorded in the financial statements at historical cost.

9. Accruals

  • Expenses/incomes for goods and services are matched to the same period.
  • Each financial transaction is recorded by two equal in value and opposite accounting entries.
  • Assets and liabilities are recorded in the financial statements at historical cost.
  • Only transactions that can be expressed in terms of money are recorded.

10. Accruals of expenses and income

  • Business entity
  • Prudence
  • Going concern
  • Prepayments

11. Prepayments of expenses and income

  • Business entity
  • Cost
  • Accruals
  • Prepayments

12. Irrecoverable debts written off

  • Materiality
  • Realisation
  • Accruals
  • Consistency

13. Asset valuation

  • Accruals
  • Realisation
  • Cost
  • Business entity

14. Going concern

  • Personal assets/liabilities are kept separate from those of the business.
  • Assets and liabilities are recorded in the financial statements at historical cost.
  • Presumes that the business will continue to trade in the forseeable future.
  • Revenue for goods can only be recorded when the legal title passes between buyer and seller.

15. Realisation

  • Items that are of very low monetary value are not recorded separately.
  • Revenue for goods can only be recorded when the legal title passes between buyer and seller.
  • Each financial transaction is recorded by two equal in value and opposite accounting entries.
  • Assets and liabilities are recorded in the financial statements at historical cost.

16. Consistency

  • Personal assets/liabilities are kept separate from those of the business.
  • When a business adopts a particular accounting policy, this is used every time unless there is a good reason to change it.
  • Revenue for goods can only be recorded when the legal title passes between buyer and seller.
  • Presumes that the business will continue to trade in the forseeable future.

17. Cost

  • When a business adopts a particular accounting policy, this is used every time unless there is a good reason to change it.
  • Assets and liabilities are recorded in the financial statements at historical cost.
  • Expenses/incomes for goods and services are matched to the same period.
  • Presumes that the business will continue to trade in the forseeable future.

18. Materiality

  • Items that are of very low monetary value are not recorded separately.
  • Personal assets/liabilities are kept separate from those of the business.
  • Where there is doubt, a conservative (lower) figure for profit/assets should be reported.
  • Presumes that the business will continue to trade in the forseeable future.

19. Depreciation of non-current assets

  • Materiality
  • Going concern
  • Realisation
  • Cost

20. Business entity

  • Items that are of very low monetary value are not recorded separately.
  • Personal assets/liabilities are kept separate from those of the business.
  • Where there is doubt, a conservative (lower) figure for profit/assets should be reported.
  • Each financial transaction is recorded by two equal in value and opposite accounting entries.