Reference no: EM132712899

Problem 1: In certain situations, companies might recognize losses but not gains. This action belongs to

a) Revenue recognition principle

b) Monetary unit assumption

c) Conservatism principle

d) Matching principle

Problem 2: The Modern Enterprises reported all assets in the balance sheet at current market value. This action is a violation of

a) Materiality concept

b) Conservatism concept

c) Full disclosure concept

d) Cost principle or historical cost concept

Problem 3: Which accounting principle/concept allows accountants to ignore other accounting principle/concept if the amount in question is immaterial?

a) Business entity concept

b) Conservatism concept

c) Materiality concept

d) Full disclosure concept

Problem 4: Which of the following is taken into account While determining the materiality of an amount?

a) Size of the amount as well as organization

b) Cumulative effect of all immaterial amounts

c) Nature of the amount in question

d) All of the above

Problem 5: Adjusting entries at the end of an accounting period would not be required for which of the following

a) Multiperiod costs that must be split among two or more accounting periods.

b) Multiperiod revenues that must be split among two or more accounting periods.

c) Expenses that have been incurred in a given period but not as yet recorded in the accounts.

d) Revenue that has been earned and recorded in the accounting records.