Match each accounting scenario described on the left with the governing accounting concept or convention listed on the right.
- Recognizing income when earned and expenses when incurred, regardless of actual cash receipt or payment.Accrual Concept
- Charging small expenses like staplers immediately to the profit and loss account rather than categorizing them as non-current assets.Materiality Convention
- Providing for all anticipated losses while ignoring unearned or anticipated gains until they are realized.Prudence Convention
- Preparing financial statements under the assumption that the business will remain in operation for the foreseeable future.Going Concern Concept
Cevap
Recognizing income when earned matches Accrual Concept; Expensing small items matches Materiality Convention; Providing for anticipated losses matches Prudence Convention; Presuming indefinite business operations matches Going Concern Concept.
Each scenario represents a classic application of a fundamental accounting guideline: Accrual aligns revenues and expenses to time periods; Materiality permits practical simplified accounting for minor values; Prudence enforces conservatism regarding potential losses; Going Concern assumes continuous ongoing operations.
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Anahtar Kavram
Accounting Concepts and Conventions