THE ACCOUNTING CONVENTION WHICH STATES THAT PROFIT MUST NOT BE RECOGNIZED UNTIL REALIZED WHILE ALL LOSSES SHOULD BE ADEQUATELY PROVIDED FOR IS TERMED
A. materiality B. objectivity C. consistency D. conservatism ✓ The accounting convention that states profit must not be recognized until realized while all losses should be adequately provided for is termed conservatism. Conservatism is a principle in accounting that suggests caution in…
THE MAIN OBJECTIVE OF ACCOUNTING REPORT IS TO PROVIDE INFORMATION ABOUT
A. a company’s shareholding B. an entity’s management C. the efficacy of assets D. a company’s economic resources ✓ The answer to the question is: D. a company’s economic resources Accounting reports serve as a crucial tool for providing information about a company’s economic…
COST ACCOUNTING ENTAILS THE PROVISION OF INFORMATION
A. for investment purposes B. for decision making ✓ C. to shareholders D. to stockholders The answer to the question is: B. for decision making Cost accounting entails the provision of information primarily for decision making. Cost accounting is a branch of…
WHEN EXPENSES ARE PAID ON BEHALF OF THE VENTURE, THE ACCOUNTING ENTRIES IS TO DEBIT
A. expenses account and credit bank account B. bank account and credit joint venture account C. joint venture account and credit bank account ✓ D. joint venture account and credit expenses account The answer to the question is: C. joint venture account and credit…
ASSIGNING REVENUES TO THE ACCOUNTING PERIOD IN WHICH GOODS WERE SOLD OR SERVICES RENDERED AND EXPENSES INCURRED IS KNOWN AS
A. passing of entries B. consistency convention C. matching concept ✓ D. adjusting for revenue The answer to the question is: C. matching concept The matching concept, also known as the matching principle, is a fundamental accounting principle that requires expenses to be recognized…