Froggy Jumps Accounting Concepts QuizOnline version Test your knowledge on key accounting concepts with this fun quiz! by Bev 1 What is the principle of consistency in accounting? a Using the same accounting methods over time. b Using different methods for each transaction. c Changing methods frequently. 2 What does the matching principle in accounting state? a Expenses should be matched with revenues in the period they occur. b Revenues should be recognized before expenses. c Expenses can be recorded at any time. 3 What is the purpose of the going concern assumption? a To assume a business will close soon. b To assume a business will expand rapidly. c To assume a business will continue operating indefinitely. 4 What does the economic entity assumption imply? a Business transactions are separate from personal transactions. b Personal and business transactions are combined. c Only cash transactions are recorded. 5 What is the revenue recognition principle? a Revenues are recognized when earned, regardless of cash received. b Revenues are recognized at year-end only. c Revenues are recognized only when cash is received. 6 What is the purpose of the historical cost principle? a Assets are recorded at their current market value. b Assets are recorded at their estimated future value. c Assets are recorded at their original purchase price. 7 What does the full disclosure principle require? a Only positive information must be disclosed. b All relevant financial information must be disclosed in statements. c Only information required by law must be disclosed. 8 What is the accrual basis of accounting? a Recording revenues and expenses when they are earned or incurred. b Recording transactions only when cash changes hands. c Recording only cash transactions. 9 What is the purpose of the materiality concept? a To ignore all insignificant items. b To ensure all items are reported equally. c To allow for flexibility in reporting insignificant items. 10 What does the conservatism principle in accounting advocate? a Recognizing expenses and liabilities as soon as possible. b Ignoring potential losses until they occur. c Recognizing revenues before they are earned.
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