Accounting Multiple Choice Question – 7 May 2019

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

The going concern concept means that when preparing accounts…?

Select ONE answer:

  1. profit should not be anticipated and losses should be provided for as soon as they are foreseen.
  2. items should normally be accounted for in a manner consistent with the way in which they were accounted for in previous years.
  3. unless there is specific information to the contrary, the firm for which the accounts are being prepared should be assumed to continue in operational existence for the foreseeable future at a level of activity not significantly less than the current level of activity.
  4. revenues and costs are recognised as they are earned or incurred, not as money is received or paid.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Accounting KS5 classes.

The answer is 3

  1. is the prudence concept.
  2. is the consistency concept.
  3. Correct
  4. is the accruals concept.

 

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