Accounting Multiple Choice Question – 10 May 2019

The accruals concept…?

Select ONE answer:

1. applies to revenues and expenses only.
2. applies to assets and liabilities only.
3. applies to revenues, expenses, assets, and liabilities.
4. is not a fundamental accounting concept.

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. It is true that the accruals concept applies to revenues and expenses but not exclusively so – it also applies to assets and liabilities.
2. It is true that the accruals concept applies to assets and liabilities but not exclusively so – it also applies to revenues and expenses.
3. Correct
4. The accruals concept is one of the fundamental accounting concepts, that is, those concepts referred to in SSAP 2.

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