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- For U.S. companies, the monetary unit assumption allows accountants to express a company’s wide-ranging assets as dollar amounts.
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Revenue recognition principle
Test your knowledge with this multiple choice question (MCQ) test on accounting principles and concepts. If you’re unsure about any questions, you can read about this topic in detail in the explanation section. flight crew cell phone and data plan tax deduction rules Under the accrual basis of accounting, expenses are matched with revenues on the income statement when the expenses expire or title has transferred to the buyer, rather than at the time when expenses are paid.
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In 2009, the FASB launched the Accounting Standards Codification (ASC or Codification), which it continues to update. This electronic database contains the official accounting standards (the equivalent of many thousands of printed pages) which apply to the financial reporting of U.S companies and not-for-profit organizations. So, how did you score on the accounting principles practice test above?
Accounting Principles Matching Questions
If the company is not considered to be a going concern (meaning the company will not be able to continue in business), it must be disclosed, and liquidation values become the relevant amounts. We begin with brief descriptions of many of the underlying principles, assumptions, concepts, constraints, qualitative characteristics, etc. CFI is the official global provider of the Financial Modeling and Valuation Analyst (FMVA)™ certification program, designed to transform anyone into a world-class financial analyst. Enroll now to gain the skills you need to take your career to the next level.
Quiz 5: Basic Accounting Principles Quiz
We’ve answered 242 popular questions related to the topic Accounting Principles. Review them all or use the search box found at the top of each page of our website for your specific questions. Use AI to generate personalized quizzes and flashcards to suit your learning preferences. Ace your exams with our all-in-one platform for creating and sharing quizzes and tests. Ask a question about your financial situation providing as much detail as possible.
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When a cause-and-effect relationship isn’t clear, expenses are reported in the accounting period when the cost is used up. For example, the $120,000 cost of equipment with a 10-year life will be charged to expense at a rate of $1,000 per month. To report a company’s net income for each month, the company will prepare adjusting entries to record each month’s share of depreciation expense, property taxes, insurance, etc. It will also prepare adjusting entries for expenses that occurred but were not paid. The going concern assumption means the accountant believes that the company will not be liquidated in the foreseeable future.
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