Question Tag: Accounting Concepts

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FR – Nov 2019 – L2 – Q4a – Ethical Issues in Financial Reporting

Explain the concepts of substance over form and going concern in financial reporting.

The IASB’s framework for preparation and presentation of financial statements requires financial statements to be prepared on the basis that they comply with certain accounting concepts and underlying assumptions.

Required:

Explain the meaning of each of the following concepts and the underlying assumption:

  • Substance over form
  • Going concern
    (6 Marks)

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FA – Nov 2011 – L1 – SA – Q15 – Accounting Concepts

This question asks which of the given options does not belong to the group of accounting concepts.

Which of the following does not belong to the group?
A. Going concern concept
B. Realisation concept
C. Matching concept
D. Entity concept
E. Profitability concept

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FA – Nov 2011 – L1 – SA – Q7 – Accounting Concepts

This question tests understanding of the duality concept in accounting.

The accounting concept that says every debit entry must have a corresponding credit entry is
A. Going concern
B. Duality concept
C. Historical cost concept
D. Money measurement concept
E. Consistency concept

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FA – Nov 2020 – L1 – SB – Q2 -Accounting Concepts (e.g., Going Concern, Accruals, Materiality)

Explain accounting concepts, provide examples, and list users of financial statements.

a. Explain the term ‘accounting concepts’. (2 Marks)

b. With particular reference to the accounting treatments, explain the following accounting concepts:
i. Entity (2 Marks)
ii. Going concern (2 Marks)
iii. Accrual (2 Marks)
iv. Materiality and aggregation (2 Marks)
v. Consistency (2 Marks)

c. In accordance with IAS 1 – Presentation of Financial Statements, highlight six qualitative characteristics of general-purpose financial statements. (4 Marks)

d. Financial statements provide information to users, and each user’s information requirement is not always the same.

Required:
Using the table below and the example provided, list four users of financial statements and their information needs.

S/N Users Information Needs
1 Employees Wage negotiation and determination of job security
2
3
4

(Total: 20 Marks)

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FA – Nov 2020 – L1 – SA – Q11 – Accounting Concepts

Identifies the accounting convention that suggests using a valuation method that understates rather than overstates results.

Which of the following accounting conventions suggests that accountants should use a method of valuation that understates rather than overstates results?
A. Conservatism
B. Historical
C. Monetary
D. Cost
E. Substance over form

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FA – Nov 2012 – L1 – SB – Q34 – Accounting Concepts

Recognize the accounting concept for sales revenue recognition.

The accounting concept which states that sales revenue should be recognized when goods and services have been received is known as?

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FA – May 2013 – L1 – SA – Q5 – Depreciation Methods and Accounting for Disposals

This question tests the understanding of depreciation charged on non-current assets.

Depreciation charged on non-current assets is known to be:

A. The amount spent to buy the non-current asset
B. The salvage value of a non-current asset
C. The part of the cost of non-current asset consumed during its period of use
D. The amount of money spent in replacing non-current assets
E. The part of the cost of non-current asset reserved to be consumed in future periods

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FA – May 2014 – L1 – SA – Q2 – Accounting Concepts

Identifies the concept that implies independence of judgment.

Which concept connotes independence of judgment on the part of the Accountant preparing financial statements?

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FA – Nov 2013 – L1 – SB – Q1b – Accounting Concepts

Listing and benefits of accounting concepts.

List any SIX accounting concepts and state their benefits.

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FA – Nov 2013 – L1 – SB – Q1a – Accounting Concepts

Definition of accounting concepts.

Define accounting concepts.

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FR – Nov 2019 – L2 – Q4a – Ethical Issues in Financial Reporting

Explain the concepts of substance over form and going concern in financial reporting.

The IASB’s framework for preparation and presentation of financial statements requires financial statements to be prepared on the basis that they comply with certain accounting concepts and underlying assumptions.

Required:

Explain the meaning of each of the following concepts and the underlying assumption:

  • Substance over form
  • Going concern
    (6 Marks)

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FA – Nov 2011 – L1 – SA – Q15 – Accounting Concepts

This question asks which of the given options does not belong to the group of accounting concepts.

Which of the following does not belong to the group?
A. Going concern concept
B. Realisation concept
C. Matching concept
D. Entity concept
E. Profitability concept

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FA – Nov 2011 – L1 – SA – Q7 – Accounting Concepts

This question tests understanding of the duality concept in accounting.

The accounting concept that says every debit entry must have a corresponding credit entry is
A. Going concern
B. Duality concept
C. Historical cost concept
D. Money measurement concept
E. Consistency concept

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FA – Nov 2020 – L1 – SB – Q2 -Accounting Concepts (e.g., Going Concern, Accruals, Materiality)

Explain accounting concepts, provide examples, and list users of financial statements.

a. Explain the term ‘accounting concepts’. (2 Marks)

b. With particular reference to the accounting treatments, explain the following accounting concepts:
i. Entity (2 Marks)
ii. Going concern (2 Marks)
iii. Accrual (2 Marks)
iv. Materiality and aggregation (2 Marks)
v. Consistency (2 Marks)

c. In accordance with IAS 1 – Presentation of Financial Statements, highlight six qualitative characteristics of general-purpose financial statements. (4 Marks)

d. Financial statements provide information to users, and each user’s information requirement is not always the same.

Required:
Using the table below and the example provided, list four users of financial statements and their information needs.

S/N Users Information Needs
1 Employees Wage negotiation and determination of job security
2
3
4

(Total: 20 Marks)

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FA – Nov 2020 – L1 – SA – Q11 – Accounting Concepts

Identifies the accounting convention that suggests using a valuation method that understates rather than overstates results.

Which of the following accounting conventions suggests that accountants should use a method of valuation that understates rather than overstates results?
A. Conservatism
B. Historical
C. Monetary
D. Cost
E. Substance over form

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FA – Nov 2012 – L1 – SB – Q34 – Accounting Concepts

Recognize the accounting concept for sales revenue recognition.

The accounting concept which states that sales revenue should be recognized when goods and services have been received is known as?

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FA – May 2013 – L1 – SA – Q5 – Depreciation Methods and Accounting for Disposals

This question tests the understanding of depreciation charged on non-current assets.

Depreciation charged on non-current assets is known to be:

A. The amount spent to buy the non-current asset
B. The salvage value of a non-current asset
C. The part of the cost of non-current asset consumed during its period of use
D. The amount of money spent in replacing non-current assets
E. The part of the cost of non-current asset reserved to be consumed in future periods

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FA – May 2014 – L1 – SA – Q2 – Accounting Concepts

Identifies the concept that implies independence of judgment.

Which concept connotes independence of judgment on the part of the Accountant preparing financial statements?

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FA – Nov 2013 – L1 – SB – Q1b – Accounting Concepts

Listing and benefits of accounting concepts.

List any SIX accounting concepts and state their benefits.

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