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Which of the following is not regarded as the fundamental concept that is identified by IAS-1

A)  The going concern conceptWRONG ANSWER

B)  The septate entity conceptWRONG ANSWER

C)  The prudence conceptWRONG ANSWER

D)  Correction conceptRIGHT ANSWER!!!


Using "lower of cost and net realisable value" for the purpose of inventory valuation is the implementation of which of the following concepts?

A)  The going concern conceptWRONG ANSWER

B)  The septate entity conceptWRONG ANSWER

C)  The prudence conceptRIGHT ANSWER!!!

D)  Matching conceptWRONG ANSWER


The concept of separate entity is applicable to which of following types of businesses?

A)  Sole proprietorshipWRONG ANSWER

B)  CorporationWRONG ANSWER

C)  PartnershipWRONG ANSWER

D)  All of themRIGHT ANSWER!!!


Does Prudence concept allow a business to build substantially higher reserves or provisions than that are actually required?



C)  To some extentWRONG ANSWER

D)  It depends on the type of businessWRONG ANSWER


The revenue recognition principal dictates that all types of incomes should be recorded or recognized when

A)  Cash is receivedWRONG ANSWER

B)  At the end of accounting periodWRONG ANSWER

C)  When they are earnedRIGHT ANSWER!!!

D)  When interest is paidWRONG ANSWER


The matching concept matches which of the following?

A)  Asset with liabilitiesWRONG ANSWER

B)  Capital with incomeWRONG ANSWER

C)  Revenues with expensesRIGHT ANSWER!!!

D)  Expenses with capitalWRONG ANSWER


The allocation of owner's private expenses to his/her business violates which of the following?

A)  Accrual conceptWRONG ANSWER

B)  Matching conceptWRONG ANSWER

C)  Separate business entity conceptRIGHT ANSWER!!!

D)  Consistency conceptWRONG ANSWER


The going concern concept assumes that

A)  The entity continue running for foreseeable futureRIGHT ANSWER!!!

B)  The entity continue running until the end of accounting periodWRONG ANSWER

C)  The entity will close its operating in 10 yearsWRONG ANSWER

D)  The entity can't be liquidatedWRONG ANSWER


American companies prepare their their financial statement in dollars whereas Japanese companies produce financial statements in yens. Ths is an example of:

A)  Stable monetary unit ConceptWRONG ANSWER

B)  Unit of measurement ConceptRIGHT ANSWER

C)  Money value conceptWRONG ANSWER

D)  Current swap conceptWRONG ANSWER


Which of the following is time span into which the total life of a business is divided for the purpose of preparing financial statements?

A)  Fiscal yearWRONG ANSWER

B)  Calendar yearWRONG ANSWER

C)  Accounting periodRIGHT ANSWER!!!

D)  Accrual periodWRONG ANSWER

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