Think
Shaji's Competitor selling the goods at a lower price than Shaji. But he does not enter it in the books of accounts
Money measurement concept
Sale of Furniture on credit is entered in books of accounts is based on which concept
Money measurement
Same accounting method should be followed year after year
consistency concept
Provision for Allowance for irrecoverable debts are based on which concepts?
Prudence concept
Furniture purchased for $4000, 5 years back is still entered at the same price in financial position
Historic cost
Which concepts are applied for provision for depreciation
Prudence
Matching
Consistency
Interest charged on owner withdrawing money from the business. Which concept is applied here?
Business entity
What is prudence concept?
Asset and Income should not be overstated and liability and expenses should not be understated
Skills of labours are not entered in books of accounts
Money measurement concept
Cash debit
Sales Credit
Which concept it is?
Duality concept
All business transactions are entered in books of accounts for foreseeable future
Going concern concept
What is Materiality concept?
The items which are of significant to the business should be entered in the books of accounts
Depreciation provided on non-current asset
Prudence concept
Senthil, a customer wants to buy a Motor Vehicle. He enquires about it on Monday and arranges cash on Tuesday. Invoice made on Wednesday by the trader as he made part payment and takes Motor Vehicle. Balance will be paid on equal instalments for 12 months. Vehicle is delivered on Thursday, and he starts to use it on Friday. On Which day, a trader can enter in books of accounts about the sale of Motor vehicle? Which concept he applies?
Wednesday, Realisation concept
How valuing inventory is based on consistency concept?
Either FIFO or AVCO or LIFO method should be followed every year while valuing inventory. Method should not be changed
Office stationery purchased for $50 is not entered in Statement of Financial position
Materiality
How does matching concepts applicable for Provision for depreciation?
The revenue earned through use of the asset should be matched with expenses made on it
Business entity concept
Business is separate from its owner