Accounting Concepts Flashcards
1
Q
State the accounting entity concept.
A
It states that the business and the owners are two separate entities. All transactions are recorded in the point of view of the business.
2
Q
State the accounting Period concept.
A
It divides life of a business into equal time periods.
3
Q
State the historical cost concept.
A
Transactions are to be recorded at historical costs initially.
4
Q
State the monetary concept.
A
Only transactions that can be quantified in dollars and cents can be recorded.
5
Q
State the going concern concept.
A
It states that a business entity is assumed to operate indefinitely unless there are signs that it has stop operating.
6
Q
State the objectivity concept.
A
Transactions are recorded based on evidence that are reliable.
