Accounting - Study Mode

[#1026] Which one of the following concepts states that the publication or presentation of financial statements should not be delayed?
Correct Answer

(C) Timeliness concept

Explanation

Solution: Timeliness concept states that the publication or presentation of financial statements should not be delayed. Timeliness principle in accounting refers to the need for accounting information to be presented to the users in time to fulfill their decision making needs.

[#1027] Land on lease should be shown in Blance sheet contrary to the fact that the company does not own that piece of land is the implementation of which accounting concept?
Correct Answer

(D) Substance over form concept

Explanation

Solution: Land on lease should be shown in Blance sheet contrary to the fact that the company does not own that piece of land is the implementation of Substance over form concept.

[#1028] Depreciation is charged on fixed assets to comply with which of the following accounting principle?
Correct Answer

(A) Matching concept

Explanation

Solution: Depreciation is charged on fixed assets to comply with Matching concept which requires that revenues must be matched with associated expenses to get a complete and accurate picture of profit and loss.

[#1029] Net profit is computed in which of the following?
Correct Answer

(B) Income statement

Explanation

Solution: Net profit is computed in Income statement. Net income, also called net profit, is a calculation that measures the amount of total revenues that exceed total expenses. It other words, it shows how much revenues are left over after all expenses have been paid.

[#1030] In income statement, gross profit is always equal to
Correct Answer

(C) Sales - cost of goods sold

Explanation

Solution: In income statement, gross profit is always equal to Sales - cost of goods sold.