As explained, it is also very important for those who keep books of account to understand accounting concepts. By understanding such accounting concepts, it will then reinforce the skills of the bookkeepers.
Append below are some True Or False Questions on Accounting Concepts:-
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1. |
The business entity concept does not apply to a sole proprietorship concern |
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2. |
If economic event cannot be measured in monetary terms, it is not considered part of the accounting data |
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3. |
As the question of sale of the business, the realizable or saleable values of its assets will not be relevant |
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4. |
It is the desire for objectivity that explains why historical cost rather than current market value forms the basis of valuation of assets |
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5. |
Consistency in accounting methods is observed to prevent misleading profits arising from differing accounting methods from being reported. |
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6. |
Prudence concept explains why closing stock is always valued at the lower of cost or market value so that profits are not overrated during the current period |
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7. |
The matching principle is base on the accrual concept of accounting |
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8. |
Accrual concept is when revenue is recognized when it is earned and expenses when they are incurred |
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9. |
Cash accounting recognizes revenue only when cash is received and recognizes expenses only when cash is paid |
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10. |
Source documents are examples of objective evidence of transactions that have taken place |
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11. |
The money measurement function eliminates important information like motivational level, inefficient management or poor working conditions |
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