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    T5 - Abfa1173 Poa (Q) 2024

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    nithnithya1411
    The document discusses accounting concepts and principles through multiple choice questions and short answer questions. It covers concepts like historical cost, entity, going concern, matching, prudence and consistency. The questions test understanding of applying these concepts in practical scenarios like revenue, expenses and financial reporting of a business.

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    T5 - Abfa1173 Poa (Q) 2024

    Uploaded by

    nithnithya1411
    38 views3 pages
    The document discusses accounting concepts and principles through multiple choice questions and short answer questions. It covers concepts like historical cost, entity, going concern, matching, prudence and consistency. The questions test understanding of applying these concepts in practical scenarios like revenue, expenses and financial reporting of a business.

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    T5_ABFA1173 POA (Q)2024

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    The document discusses accounting concepts and principles through multiple choice questions and short answer questions. It covers concepts like historical cost, entity, going concern, matching, prudence and consistency. The questions test understanding of applying these concepts in practical scenarios like revenue, expenses and financial reporting of a business.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    38 views3 pages

    T5 - Abfa1173 Poa (Q) 2024

    Uploaded by

    nithnithya1411
    The document discusses accounting concepts and principles through multiple choice questions and short answer questions. It covers concepts like historical cost, entity, going concern, matching, prudence and consistency. The questions test understanding of applying these concepts in practical scenarios like revenue, expenses and financial reporting of a business.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    ABFA1173 Principles of Accounting 1

    Tutorial 5 – Accounting Concepts and Conventions

    Section 1: Multiple choice questions

    1. The accounting concept that requires all transactions to be recorded at


    their original cost to the business is called 5. Which accounting concept is being applied when Mr Singh’s new retail
    clothes business is assumed to have endless business life?
    A. Entity concept
    B. Prudence concept A. Going concern
    C. Historical cost concept B. Prudence
    D. Going concern concept C. Consistency
    D. Accounting period
    2. ________________supports that allowance for doubtful debts should
    be provided to write down the value of trade receivables. 6. Inventories should be valued at the lower of cost and net realisable
    value. Which one of the following accounting concept governs this?
    A. Entity concept
    B. Going concern concept A. Going concern concept
    C. Historical cost concept B. Consistency concept
    D. Conservatism concept C. Prudence concept
    D. Accounting period
    3. Affairs of the business should be alienated from the personal affairs of
    the owner(s). 7. Sales revenue will be recognised when goods and services have been
    supplied, while costs related to the goods and services supplied will be
    A. Conservatism concept recognised too. The accounting concept which governs this is
    B. Going concern concept
    C. Historical cost concept A. Matching concept
    D. Entity concept B. Consistency concept
    C. Prudence concept
    4. Which accounting concept is being applied when insurance prepaid at D. Entity concept
    the end of the accounting period is deducted from business’s expenses
    in the Income Statement? 8. Explain both Primary and Secondary Qualitative Characteristics:

    A. Accounting period
    B. Historical cost
    C. Consistency
    D. Matching
    ABFA1173 Principles of Accounting 2

    Section 2:
    Question 4
    Question 1
    Match the item in Column A with the description in Column B.
    Anna operates a laundry business. During the year, she receives RM20,000
    for services rendered. Her customers still owe her RM10,000 for services A Column A B Column B
    rendered in the same year. The operating expenses paid so far amount to a. Accounting entity i. It supports verifiable evidence
    RM12,000 while accrued expenses totaled RM8,000. for the occurrence of any
    business transactions.
    Which accounting concept is being applied here? b. Historical cost ii. Use of a common unit of
    measurement for reporting
    Question 2 financial activity
    c. Objectivity iii. Profit should not be overstated
    (a) What is a basic assumption of the “business entity” concept? and losses should not be
    (b) When a banker is considering a loan to a sole proprietor, would a understated.
    banker have any interest in the amount and nature of the personal d. Money measurement iv. Usual basis of recording assets.
    assets and liabilities of the proprietor? Explain. e. Prudence v. Define which transaction should
    or should not be reported in
    Question 3 books of the business.

    Name the accounting concepts described here:


    (a) Revenue from business activity and expenses associated with
    earning that revenue are recorded in the same accounting period.
    (b) Business is expected to remain in operation indefinitely.
    (c) Similar items should receive similar accounting treatment.
    (d) Allows financial statements to be prepared periodically.
    (e) A business’s financial information is recorded and reported
    separately from the owner’s personal transactions.
    (f) All transactions of a business entity are recorded at the original cost
    to the business.
    (g) This principle discourages over reporting of assets and revenue.
    ABFA1173 Principles of Accounting 3

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