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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.