Bookkeeping Basics - Accounting Concepts and Measurement Assessment Rated A+
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Course
Bookkeeping Basics - Accounting
Institution
Bookkeeping Basics - Accounting
Bookkeeping Basics - Accounting
Concepts and Measurement Assessment
Rated A+
What is the principle of consistency in accounting?
The principle of consistency requires that a company use the same accounting methods and
principles from one period to the next to ensure comparability.
What...
Bookkeeping Basics - Accounting
Concepts and Measurement Assessment
Rated A+
What is the principle of consistency in accounting?
✔✔ The principle of consistency requires that a company use the same accounting methods and
principles from one period to the next to ensure comparability.
What is the matching principle?
✔✔ The matching principle states that expenses should be recorded in the same period as the
revenues they help to generate.
What is the revenue recognition principle?
✔✔ The revenue recognition principle dictates that revenue should be recognized when it is
earned, regardless of when payment is received.
What is the cost principle in accounting?
✔✔ The cost principle states that assets should be recorded at their original cost rather than their
current market value.
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, What does the conservatism principle entail?
✔✔ The conservatism principle suggests that when choosing between multiple accounting
methods, the one that is least likely to overstate assets and income should be selected.
What is the significance of the accrual basis of accounting?
✔✔ The accrual basis of accounting recognizes revenues and expenses when they are incurred,
rather than when cash is exchanged, providing a more accurate financial picture.
What does the term "liquidity" refer to in accounting?
✔✔ Liquidity refers to how easily and quickly an asset can be converted into cash without
significantly affecting its value.
What is an accounting period?
✔✔ An accounting period is a specific span of time during which financial transactions are
recorded and financial statements are prepared.
What is the purpose of depreciation in accounting?
✔✔ Depreciation allocates the cost of a tangible asset over its useful life to reflect its gradual
loss of value.
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