Associate Degree in Accounting and Finance (ADAF) - Minhaj University Lahore

Question 1

Which accounting concept dictates that expenses should be recorded in the same period as the revenues they help generate?

Accepted Answer

Matching Principle

Answer

Going Concern Concept

Answer

Consistency Principle

Answer

Monetary Unit Assumption

Question 2

What is the effect on the accounting equation if a business buys office equipment on credit?

Accepted Answer

Assets increase, Liabilities increase

Answer

Assets increase, Equity increases

Answer

Assets increase, Liabilities decrease

Answer

Assets decrease, Liabilities increase

Question 3

Which accounting principle requires that financial statements be prepared assuming the business will continue to operate indefinitely?

Accepted Answer

Going Concern Concept

Answer

Consistency Principle

Answer

Full Disclosure Principle

Answer

Materiality Concept

Question 4

Under the accrual basis of accounting, when should revenue be recognized?

Accepted Answer

When the performance obligation is satisfied

Answer

When cash is received from the customer

Answer

When the order is placed by the customer

Answer

When the invoice is printed

Question 5

Which financial statement reports the financial position of an entity at a specific point in time?

Accepted Answer

Balance Sheet

Answer

Income Statement

Answer

Statement of Cash Flows

Answer

Statement of Changes in Equity

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