GK
ACCOUNTING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Accounting year: 1st April to 31st March
|
|
|
Accounting equation: Assets = Liabilities + Capital
|
|
|
Cost concept: Recognising transactions at historical cost
|
|
|
Accrual concept: Recognising revenue on receipt of cash
|
Detailed explanation-1: -Similar Entity Concept is not a concept of financial accounting. Accrual concept and Dual Aspect Concept both are accounting concepts. Accrual concept means to record the revenue or expenses when the transaction takes place and not when the actual payment is done.
Detailed explanation-2: -Accrual concept implies accounting on cash and credit basis. It basically means that all the expenses are to be recorded when they are incurred, irrespective of when the payment is made, and all incomes when they are actually realised and not when the cash is received.
Detailed explanation-3: -The general concept of accrual basis of accounting is that the financial transactions are recognised by matching of the revenue to the expenses when a transaction occurs instead of when the payment for the same is made or received.
Detailed explanation-4: -A “hybrid basis” is a basis of the accounting system. Under it, the features of the cash and accrual basis are combined. However, “payment basis” is not a basis of the accounting system.