Question

In: Accounting

Match each of the following basic concepts and principles to the appropriate description. Conservatism Expense recognition...

Match each of the following basic concepts and principles to the appropriate description.

Conservatism
Expense recognition
Consistency
Materiality
Disclosure

The accountant should exercise the option that results in a lower balance of assets, lower net income or a higher balance of debt.

 Answer 1Choose...ConsistencyDisclosureExpense recognitionMaterialityConservatism

The costs of doing business must be record in (or matched to) the same account period as the revenues which they helped to generate.

 Answer 2Choose...ConsistencyDisclosureExpense recognitionMaterialityConservatism

This prevents people from changing accounting methods for the sole purpose of manipulating figures on the financial statements.

 Answer 3Choose...ConsistencyDisclosureExpense recognitionMaterialityConservatism

Any and all information that affects the full understanding of a company's financial statements must be included with the financial statements.

 Answer 4Choose...ConsistencyDisclosureExpense recognitionMaterialityConservatism

This refers to the significance of information to users. The more significant a piece of information is means that it could influence or change a user's decision.

Solutions

Expert Solution

Expense recognition- It states that expenses incurred in an accounting period should be matched with revenues during that period. The expense recognition concept implies that all revenues earned during an accounting year, whether received during that year or not and all costs incurred, whether paid during the year or not should be taken into account, while ascertaining profit or loss for that year.

Disclosure Principle- The principle of disclosure requires that all material and relevant facts concerning financial performance of an enterprise must be fully and completely disclosed in the financial statements and their accompanying footnotes. This is to be enable the users to make correct assessments about the profitability and financial soundness of the enterprise and help them to take informed decisions.

The Materiality Principle- This principle requires that accounting records should consist only of such events which are significant from the point of view of income determination. Insignificant or irrelevant items should not be shown in the books of accounts. Any fact would be considered as material if it is reasonably believed that its knowledge would influence the decision of the informed user of financial statements.

The Consistency Principle- Both inter-firm and intra-firm comparisons can be possible only when accounting policies and practices followed by the enterprises are uniform and are consistent over the period of time. Consistency Principle states that accounting policies and methods should remain consistent from one year to another.

Conservatism Principle- The concept of conservatism requires that profits should not be recorded until realized but all losses even those which may have a remote possibility, are to be provided for in the books of accounts. Valuing closing stock at cost price or market price whichever is lower; Creating provision for doubtful debts; Writing off intangible assets like goodwill, patents etc from the books of accounts are some of the examples of the application of the principle of conservatism.

The accountant should exercise the option that results in a lower balance of assets, lower net income or a higher balance of debt. Conservatism
The costs of doing business must be record in (or matched to) the same account period as the revenues which they helped to generate. Expense recognition
This prevents people from changing accounting methods for the sole purpose of manipulating figures on the financial statements. Consistency
Any and all information that affects the full understanding of a company's financial statements must be included with the financial statements. Disclosure
This refers to the significance of information to users. The more significant a piece of information is means that it could influence or change a user's decision. Materiality

Kindly give a positive rating if you are satisfied with the answer. Feel free to ask if you have any doubts. Thanks.

ekkarill92 answered 8 months ago
Next > < Previous

Related Solutions

Match each description with the appropriate term.       -       A.       B....
Match each description with the appropriate term.       -       A.       B.       C.       D.       E.       F.       G.       H.       I.       J.    Subset of corporate governance that focuses on the management and assessment of strategic IT resources.       -       A.       B.       C.       D.       E.       F.       G....
Match each description with the appropriate term.       -       A.       B....
Match each description with the appropriate term.       -       A.       B.       C.       D.       E.       F.       G.       H.       I.       J.    A subset of the database that defines user’s data domain and access.       -       A.       B.       C.       D.       E.       F.       G.       H....
Match each description with the appropriate term.       -       A.       B....
Match each description with the appropriate term.       -       A.       B.       C.       D.       E.       F.       G.       H.       I.       J.    Automatically generated constantly by the system when user enters a PIN.       -       A.       B.       C.       D.       E.       F.       G.       H.   ...
Part II. Matching Match each of the following terms with their most appropriate description. A. Target...
Part II. Matching Match each of the following terms with their most appropriate description. A. Target risk B. Countervailing risk C. Synergistic effect 1.The risk scenario which prompts the whole decision process, often reflected by the main objective 2.The risk that arises from the action of managing the target risk 3.Desirable consequence of managing risk other than reducing the target risk
Match the appropriate method with the description.       -       a.       b....
Match the appropriate method with the description.       -       a.       b.       c.       d.       e.       f.       g.       h.    A chart that is especially useful for showing the relative size of one categorycompared to the whole.       -       a.       b.       c.       d.       e.       f.       g.       h.   ...
Using the list provided match the following vendor and expense transaction with the description of the...
Using the list provided match the following vendor and expense transaction with the description of the transaction. I have to match the transactions with the description given. These are the transactions given: Expense Check       Bill       Pay Bills       Purchase Order Vendor Credit Credit Card Credit These are the descriptions given: 1.The form used to select bills we want to pay. 2. The form used to order and track products from vendors. 3. The onscreen form used to record...
Match each term or phrase with its correct description by writing the appropriate letter in the...
Match each term or phrase with its correct description by writing the appropriate letter in the blank: ……….   Business objectives or mission ………. Management accounting ……….   Income Statement ……….   Long-term planning ……….   Accounting ……….   Accountability ……….   Reliability ……….   Maximising business wealth ……….   Financial accounting ……….   Control 1.A process and system for collecting, analysing and communicating economic information 2.Financial information provided to, and useful for, a broad range of users, including managers and others 3.General statements of the business’ aim, typically...
Match the most appropriate answer choice to each statement provided.                 According to ionization principles, a...
Match the most appropriate answer choice to each statement provided.                 According to ionization principles, a weak electrolyte will ionize or dissociate in a(n) ____________ process.                 The common ion effect _______________ ionization because of the presence of an ion from an alternate source.                 The difference in equilibrium caused by the common ion effect occurs because of ______________ principle.                 The addition of a common ion from an alternate source effectively ___________ either product or reactant, shifting equilibrium to...
Instructions: Match each description to its plan by writing the description's number in the appropriate blank....
Instructions: Match each description to its plan by writing the description's number in the appropriate blank. Some descriptions may apply to two or more plans. Plans: Business continuity plan (BCP) Disaster recovery plan (DRP) Business impact analysis (BIA) Incident response plan Descriptions: May be part of a BCP or referred to in a BCP Covers all functions of a business, including IT systems, facilities, and personnel Includes critical business functions (CBFs) Details emergency response and activities Generally includes interviews, surveys,...
Match the following events of an action potential to the most appropriate description. Answers will only...
Match the following events of an action potential to the most appropriate description. Answers will only be used once. Question 1 options: 1234 Resets electrical conditions of the neuron following an action potential 1234 An exceptionally strong stimulus can trigger a subsequent action potential 1234 Voltage-gated sodium channels are open, and the neuron cannot respond to another stimulus 1234 The intracellular side of the neuronal membrane becomes less negative due to an influx of sodium ions 1. Relative refractory period...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT