BACHELOR OF BUSINESS ADMINISTRATION

Previous
Next

BUSINESS ADMINISTRATION

FINANCIAL ACCOUNTING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Sam Ryo is the proprietor (owner) of Sam’s, a retailer of golf apparel. When recording the financial transactions of Sam’s, Sam does not record an entry for a car he purchased for personal use. Sam took out a personal loan to pay for the car. What accounting concept guides Sam’s behavior in this situation?
A
Monetary unit assumption
B
Cash basis concept
C
Economic entity assumption
D
Pay back concept
Explanation: 

Detailed explanation-1: -The accounting basis that records revenues when goods or services are provided to customers and expenses with related revenues is referred to as: Accrual-basis.

Detailed explanation-2: -The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange, is the: Measurement (Cost) principle.

Detailed explanation-3: -Noncurrent liabilities include debentures, long-term loans, bonds payable, deferred tax liabilities, long-term lease obligations, and pension benefit obligations.

Detailed explanation-4: -The common characteristics possessed by all assets is the capacity to provide future services or benefits to the entities that use them.

There is 1 question to complete.
Previous
Next