Principles

Question 0

Going Concern Principle

Answer 0

The life of the business is assumed to be continuous and it’s records should be kept on a basis

Question 1

Entity Principle

Answer 1

The business is separate from the owner

It’s records should be kept on a basis

Question 2

Reporting Period Principle

Answer 2

The life of the business must be divided into periods of time to allow reports to be prepared

Question 3

Historical Cost Principle

Answer 3

Transactions should be recorded at their originally price, as the price is verifiable by a SD

Question 4

Consistency Principle

Answer 4

The business should use same accounting method to allow comparison from one period to the next

Question 5

Conservatism Principle

Answer 5

Losses should be recorded when probable
Gains only when certain
So that assets and liabilities are not overstated

Question 6

Monetary Principle

Answer 6

All records/reports should be recorded in the currency of the country where report is done