Accounting - Study Mode
[#1531] The revenue recognition principle dictates that all types of incomes should be recorded or recognized when
Correct Answer
(C) When they are earned
Explanation
Solution: The revenue recognition principle dictates that all types of incomes should be recorded or recognized when they are earned. The revenue recognition principle, a combination of accrual accounting and the matching principle, stipulates that revenues are recognized when realized and earned, not necessarily when received.
[#1532] The matching concept matches which of the following?
Correct Answer
(C) Revenues with expenses
Explanation
Solution: The matching concept matches revenues with expenses. The matching concept is an accounting practice whereby firms recognize revenues and their related expenses in the same accounting period.
[#1533] The allocation of owner's private expenses to his/her business violates which of the following?
Correct Answer
(C) Separate business entity concept
Explanation
Solution: The allocation of owner's private expenses to his/her business violates Separate business entity concept. The business entity concept states that the transactions associated with a business must be separately recorded from those of its owners or other businesses.
[#1534] The going concern concept assumes that
Correct Answer
(A) The entity continue running for forseeable future
Explanation
Solution: The going concern concept assumes that the entity continue running for forseeable future. The going concern principle is the assumption that an entity will remain in business for the foreseeable future.
[#1535] American companies prepare their financial statement in Dollars whereas Japanese companies produce financial statement in Yen. This is an example of:
Correct Answer
(B) Unit of measurement concept
Explanation
Solution: American companies prepare their financial statement in Dollars whereas Japanese companies produce financial statement in Yen. This is an example of Unit of measurement concept.