BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The basic principles of accounting are ____
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historical cost and fair value
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economic entity, going concern, and accrual
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measurement, revenue recognition, expense recognition and full disclosure
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assets, liabilities, equity, income and expenses
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Explanation:
Detailed explanation-1: -Take a look at the three main rules of accounting: Debit the receiver and credit the giver. Debit what comes in and credit what goes out. Debit expenses and losses, credit income and gains.
Detailed explanation-2: -The revenue recognition principle, a key feature of accrual-basis accounting, dictates that companies recognize revenue as it is earned, not when they receive payment. Accurate revenue recognition is essential because it directly affects the integrity and consistency of a company’s financial reporting.
Detailed explanation-3: -There are four basic assumptions of financial accounting: (1) economic entity, (2) fiscal period, (3) going concern, and (4) stable dollar.
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