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Chapter 2
Accounting Concepts and Principles

PROBLEM 1: TRUE OR FALSE

1. TRUE
2. TRUE
3. TRUE
4. FALSE – liquidating concern
5. TRUE
6. FALSE – Materiality is ‘entity-specific’, meaning it depends on
the facts and circumstances surrounding a specific entity.
7. FALSE – should not exceed
8. TRUE
9. TRUE
10. TRUE

PROBLEM 2: TRUE OR FALSE

1. FALSE – Going Concern
2. FALSE – Consistency
3. TRUE
4. FALSE – Prudence or Conservatism
5. TRUE
6. FALSE – SEC
7. FALSE
8. FALSE – PFRSs only. The Conceptual Framework is not a
Standard.
9. TRUE
10. TRUE
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PROBLEM 3: FOR CLASSROOM DISCUSSION

1. A
2. B
3. A
4. A
5. A
6. B
7. C
8. D
9. C
10. B
11. D

PROBLEM 4: MULTIPLE CHOICE

1. D
2. C
3. A
4. A
5. C
6. C
7. B
8. C
9. C
10. C

PROBLEM 5: MULTIPLE CHOICE

1. B
2. D
3. C
4. A
5. B
6. C
7. C
8. B
9. D
10. D
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PROBLEM 6: CLASSROOM ACTIVITY

The learner’s work is graded based on the teacher’s judgment.