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ACCOUNTING PRINCIPLES
1) Accruals concept: revenue and expenses are
recorded when they occur and not when the cash
is received or paid out;
(2) Consistency concept: once an accounting method
has been chosen, that method should be used unless
there is a sound reason to do otherwise;
(3) Going concern: the business entity for which
accounts are being prepared is in good condition and
will continue to be in business in the foreseeable
future;
4)The full disclosure principle is a concept that
requires a business to report all necessary
information about their financial statements and
other relevant information to any persons who are
accustomed to reading this information.
5) matching principle definition The principle that
requires a company to match expenses with related
revenues in order to report a company's profitability
during a specified time interval. Ideally, the matching
is based on a cause and effect relationship: sales
causes the cost of goods sold expense and the sales
commissions expense.
6) Dual aspect concept, also known as duality
principle in accounting, states that every business
transaction should have double entry in bookkeeping.
Forming the basis of double entry bookkeeping
system, dual aspect concept records every
transaction under two basic classifications of credit
and debit.
ACCOUNTING CYCLE
1 The work of Accounting begins:
(A) Where the work of Book-Keeping begins
(B) Where the work of Book-Keeping ends
(C) Where the books are not written
(D) Where there is no object of keeping the books.
2 Cash invested by owner is called
a) Assets
b) Liabilities
c) Capital
d) Loan
3 Cash or goods taken away by proprietor for
personal use is called
a) Drawing
b) Scale
c) Charity
d) Expense