Goyal Brothers Prakashan solutions for Commercial Applications [English] Class 10 ICSE chapter 5 - Generally Accepted Accounting Principles (GAAP) [Latest edition]

Book keeping is a part of accounting, therefore its scope is ______ where as scope of accounting is ______.

______ is the art and science of recording transactions while ______ is the art and science of recording, classifying and summarising transactions.

Which of the following is/are correct statement(s)?

Statement 1: The Money Measurement Concept allows for the recording of all significant events, irrespective of their monetary value.

Statement 2: The Dual Aspect Principle ensures that every financial transaction is recorded twice in the accounting records.

Which of these is not a purpose of financial recordings?

The accounting cycle consists of ______.

A company decides to change its method of depreciation from the straight-line method to the reducing balance method without disclosing this change in the financial statements. Which principle has been violated?

It is the second stage and provides conclusions.

A company values its machinery at its original purchase cost minus accumulated depreciation. This valuation method is based on which of the following assumptions?

The Money Measurement Concept allows the recording of non-monetary transactions, such as the reputation of a company, as long as they are significant to the business.

Accounting cycle ends with the ______.

Which of the following statement(s) is/are correct?

Statement 1: The Going Concern Concept assumes that a business will not cease operations in the near future.

Statement 2: The Business Entity Concept implies that the business and its owner are separate entities, and the owner's personal transactions should be recorded in the business books.

Accounting principles are necessary due to which of the following reasons?

Regarding fundamental accounting principles, which statement accurately reflects the “Entity Concept”?

1. The Entity Concept emphasizes that a business’s financial activities should be reported separately from the personal finances of its owners.
2. The Entity Concept dictates that all transactions should be recorded using a single currency.
3. The Entity Concept suggests that the money withdrawn by the proprietor from the firm for his personal use should be treated as drawings.
4. The Entity Concept focuses on matching revenues and expenses to determine net income.

Ms. Mira is auditing a company's financial statements and notice that no footnotes have been provided for significant liabilities. Which accounting principle is most likely being violated?

On the basis of this concept, only those transactions are recorded in accounts which can be expressed in terms of money.

This concept assumes that the business will continue to exist for a long time in the future.

It is due to this concept that financial statements are prepared at regular intervals, generally one year.

This principle suggests that every debit has a corresponding and equal credit.

According to this principle, accounts should be prepared in such a way that all the material information required by users of financial statements is clearly disclosed.

According to this principle, cost of a particular period should be charged from the revenue of same period only.

Assertion (A): According to the Prudence Principle, the valuation of Closing Stock is based on either its cost price or its net realizable value, whichever is lower.

Reason (R): This practice ensures that a business firm does not present a more favourable financial position than what it actually is.

This principle states that accounting procedures and methods should remain consistent from one year to another.

The Accounting Period Concept requires that financial statements be prepared at regular intervals, even if the business is expected to close soon.

Assertion (A): The Going Concern Principle assumes that a company will continue its operations for the foreseeable future.

Reason (R): This principle allows fixed assets to record at market value. assets and liabilities to be reported at their historical cost rather than their liquidation value.

This principle is an exception to the principle of full disclosure.

According to Business Entity Concept:

Accounting means ______.

According to the ______ Principle of accounting, transactions are recorded on the assumption that the business will exist for an indefinite period of time.

Ledger is also called the ______.

The retirement of manager of the company cannot be recorded in the book of accounts, because it is not possible to estimate the financial effect of retirement. Which accounting principle would be applicable for the above statement?

With reference to the Dual Aspect Principle identify the correct option:

Which accounting principle specifies that business will exist for an indefinite period of time?

What is accounting cycle?

What is business entity concept of accounting?

“Firms live forever.” Explain with reference to the concept of accounting.

Closing stock is always valued at market price. Justify for or against by citing two reasons.

What is meant by going concern concept of Accounting.

“Every transaction has four effects on accounting records.” Give two reasons either for or against.

State four stages of Accounting cycle.

“Accounts should disclose all material information” (with reference to the concept of accounting). Justify either for or against by giving two reasons.

With reference to the concept of accounting only those transactions are recorded in accounts which can be expressed in terms of money. Justify either for or against.

“Every transaction has two effects.” (with reference to the concept of Accounting). Give a reason either for or against.

“The capital provided by the owner is a liability of the firm.” Answer with reference to the concept of Accounting.

Justify the following:

Every transaction is recorded in at least three accounts.

Explain the concept of the matching principle.

What does GAAP stand for in Accounting?

Explain Matching Concept of GAAP.

Discuss in brief the basic principles of accounting.

Name and explain the accounting convention which says record all anticipated losses but ignore all anticipated gains.

Explain the money measurement principle of accounting.

Explain any two basic concepts of accounting.

Explain the Dual Aspect Principle.

Explain the going concern concept.

Explain Accounting Period Concept.

Explain matching principle of accounting.

Write short notes on the business entity concept.

Write short note on the going concern concept.

Explain the Business Entity Concept.

Explain the Dual Aspect Principle.

Discuss in brief the basic principles of accounting.

What does GAAP stand for in Accounting?

Explain the Business Entity Concept.

Explain the Money Measurement Concept.

Define the term GAAP.

Why are Generally Accepted Accounting Principles (GAAP) needed?

Define the term GAAP.

Explain the need for GAAP for accounting.

Which principle of Generally Accepted Accounting Principles (GAAP) distinguishes between Business transactions and Personal transactions? Briefly explain about it.

Define the term Book-keeping.

What is accounting?

Explain the purpose of financial recording.

Define accounting.

Distinguish between Book Keeping and Accounting.

Explain the accounting cycle.

Define the term GAAP.

Explain the Money Measurement Concept.

Explain the Dual Aspect Principle.

Explain matching principle of accounting.

"The capital provided by the owner is treated as a liability of the firm." Explain the concept on which the above depends.

"Fixed assets should be valued at the market price." Comment.

"Accounting records serve as a source of information to the creditors of an organisation". Comment.

Explain the principle of materiality.

“Principle of consistency is a modifying principle.” Comment.

“Every transaction has four effects on accounting records.” Give two reasons either for or against.

“Accounts should disclose all material information” (with reference to the concept of accounting). Justify either for or against by giving two reasons.

Closing stock is always valued at market price. Justify for or against by citing two reasons.

“The principle of full disclosure and principle of materiality are contradictory.” Comment.

ABC Ltd. receives an advance payment of ₹ 50,000 for goods that will be delivered in the next financial year. The accountant records this amount as revenue in the current financial year. Analyse this action according to the Realisation Principle. What should have been the correct treatment, and how does this impact the financial statements?

Sethi & Sons. is in the process of preparing its year-end financial statements. The management decides not to disclose a contingent liability related to a pending lawsuit, as they believe the outcome will be favourable.

1. Discuss the accounting principle that is at risk of being violated.
2. What are the potential consequences of this non-disclosure for the company?

A business owner invests ₹ 10,00,000 of personal funds into their business but does not record this as a liability in the business’s financial statements, considering it to be personal capital.

1. Discuss the accounting principle that is at risk of being violated.
2. How should this transaction be properly recorded, and what are the implications of not following the correct procedure?