Qualitative Charateristics
Unit 1 Multiple Choice –
Qualitative Characteristics and Accounting Principles
Select the most appropriate qualitative characteristic or accounting principle that would apply to each of the following scenarios. 1. Anna Conda is the owner of Reptile World. The business drew a cheque for $15,000 payable to Globe Trotter Travel for a family holiday. Which accounting principle applies?
Historical Cost
Going Concern
Entity
Monetary
2. Which one of the following is NOT a qualitative characteristic
Relevance
Understandability
Conservatism
Comparability
3. Arthur Allsop is the owner of Sugo, an advertising agency who provides advertising services to clients on the basis of three, six and twelve months. The business reports the total amount of all advertising contracts as revenue for the month in which the contracts are signed and cash received. Which accounting principle applies?
Going Concern
Reporting Period
Relevance
Entity
4. The owner of a business has argued that the value of Furniture shown in the Balance Sheet is incorrect as it shows the potential market value of $40,000 rather than its original purchase price of $55.000 (inv 246). Which accounting principle has been breached?
Monetary
Relevance
Historical Cost
Conservatism
5. The business wants to give the impression that it is doing well. Instead of valuing stock at $49,000 cost price, it values the stock at the expected selling price of $79,000. Which qualitative characteristic has been breached
Relevance
Monetary
Comparability
Conservatism
6. The Brice brothers run three small successful businesses. The transactions of each of these businesses are combined and recorded in the same set of accounts. Which accounting principle has been breached?
Relevance
Entity
Going Concern
Reporting Period
7. Adam owns the Eureka Bookstore. During a recent lunch break he found a jacket on sale for $100 that
Qualitative Characteristics and Accounting Principles
Select the most appropriate qualitative characteristic or accounting principle that would apply to each of the following scenarios. 1. Anna Conda is the owner of Reptile World. The business drew a cheque for $15,000 payable to Globe Trotter Travel for a family holiday. Which accounting principle applies?
Historical Cost
Going Concern
Entity
Monetary
2. Which one of the following is NOT a qualitative characteristic
Relevance
Understandability
Conservatism
Comparability
3. Arthur Allsop is the owner of Sugo, an advertising agency who provides advertising services to clients on the basis of three, six and twelve months. The business reports the total amount of all advertising contracts as revenue for the month in which the contracts are signed and cash received. Which accounting principle applies?
Going Concern
Reporting Period
Relevance
Entity
4. The owner of a business has argued that the value of Furniture shown in the Balance Sheet is incorrect as it shows the potential market value of $40,000 rather than its original purchase price of $55.000 (inv 246). Which accounting principle has been breached?
Monetary
Relevance
Historical Cost
Conservatism
5. The business wants to give the impression that it is doing well. Instead of valuing stock at $49,000 cost price, it values the stock at the expected selling price of $79,000. Which qualitative characteristic has been breached
Relevance
Monetary
Comparability
Conservatism
6. The Brice brothers run three small successful businesses. The transactions of each of these businesses are combined and recorded in the same set of accounts. Which accounting principle has been breached?
Relevance
Entity
Going Concern
Reporting Period
7. Adam owns the Eureka Bookstore. During a recent lunch break he found a jacket on sale for $100 that