Examkin

Soru

Zorluk: OrtaAccounting Concepts and Conventions

Match each practical accounting treatment described on the left with its corresponding governing accounting concept or convention on the right.

  • Recording a motor vehicle at its original purchase cost of ₦8,000,000\text{₦}8,000,000 rather than its current estimated market value of ₦9,500,000\text{₦}9,500,000.Historical Cost Concept
  • Debiting owner drawings when business funds are used to pay for the owner's domestic utility bill.Business Entity Concept
  • Recognizing revenue from goods sold on credit when delivered to the customer rather than when cash payment is received.Realization Concept
  • Valuing closing stock at the lower cost price of ₦1,200,000\text{₦}1,200,000 instead of its higher net realizable value of ₦1,450,000\text{₦}1,450,000.Prudence (Conservatism) Convention

Cevap

The correct matches are: 1. Recording motor vehicles at acquisition cost matches the Historical Cost Concept; 2. Recording personal expenses as drawings matches the Business Entity Concept; 3. Recognizing sales revenue upon delivery matches the Realization Concept; 4. Valuing inventory at the lower of cost and net realizable value matches the Prudence Convention.
Each accounting scenario corresponds directly to a specific concept: recording assets at purchase cost complies with Historical Cost; separating personal and business transactions via drawings enforces Business Entity; recognizing income when earned upon delivery follows Realization; and preventing overstatement of inventory assets obeys Prudence.

Adım Adım Çözüm

1
Analyze each scenario on the left to identify its governing financial reporting objective.
Item 1 relates to asset valuation; Item 2 relates to business/personal boundary; Item 3 relates to revenue recognition timing; Item 4 relates to conservative stock valuation.
Matching items requires isolating the fundamental accounting rule operationalized by each accounting practice.
2
Pair each practical treatment with its corresponding theoretical concept or convention.
Original acquisition cost valuation maps to Historical Cost; owner personal transaction isolation maps to Business Entity; point-of-sale revenue recording maps to Realization; avoiding asset overstatement maps to Prudence.
Each practical accounting treatment directly implements one of the recognized accounting concepts or conventions.

Anahtar Kavram

Accounting Concepts and Conventions
Bu soruyu puanla

Konular

Accounting Concepts and Conventions

Bu konudan daha fazla soru