Assignment- Principles of Accounting

Q-1 Proprietor Personal Expenditure not recorded in the books of accounts due to :

          a)    Materiality                                       b) Conservatism

c) Going Concern                                 d) Business Entity Concept

Q-2 Two primary qualitative characteristics of financial statements are :

a)    Understandability and Materiality          b)  Relevance and Reliability

c) Neutrality                                                 d) Materiality and Reliability

Q-3 Assets are held in the business for the purpose of :

a)    Resale                                      b) Conversion into cash

c) Earning Revenue                      d) none of the above

Q-4 Decrease in the amount of Trade Payables

a)    Increase in cash                     b) Decrease in Bank over draft account

c) Decrease  in cash                    d) No change in assets

Q-5 Explain the following Principles :

(i)                 Verifiable Objective Concept

(ii)              Revenue Recognition Concept

(iii)            Matching Concept

(iv)            Prudence Concept

(v)              Accounting Period Principle

(vi)            Materiality Principles

(vii)          Business entity Concept

Q-6  "Only Financial Transactions are recorded in accounting". Explain.