1) A business decides to record stock of stationery as assets only if they are over £10,000 which concept is being applied. a) Conservatism b) Dual Aspect c) Materiality d) Money Measurement 2) Under which concept is the provision for bad debts created? a) Consistency concept b) Money measurement c) Prudence concept d) Historic concept 3) Mulenga Co Ltd decided to change from the straight line method of depreciation to the reducing balance method. Which concept hat the company contravened? a) Going concern concept b) Historic cost concept c) Prudence concept d) Consistency concept 4)  Which concept states that financial accounting only records items capable to be expressed in monetary terms and most people will agree to the money values of the items? a) Conservatism concept b) Dual aspect concept c) Materiality concept d) Money measurement concept 5) Which concept advocates that a sale on credit is recognised when sale is made and the invoice sent out rather than waiting until the cash from the sale is received. a) Business entity Concept b) Accrual Concept c) Objectivity Convention d) The separate valuation principle 6) The ......................... concept states that financial accounting information relates only to the activities of the business and not the activities of its owner(s) regardless of its legal status. a) Dual aspect concept  b) Going concern concept c) Materiality concept d) Business entity concept 7) Which concept states that every transaction has two effects and these effects are always equal to each other.  a) Dual aspect concept b) Business entity concept c) Money measurement concept d) Going concern concept 8) Identify a concept which holds that an accountant is entitled to work out the financial accounts of a business and draw up the accounts on the basis that the business will continue for the conceivable future is called a) The accruals concept b) The prudence concept c) The going concern concept d) The concept of business entity 9) State the concept which justifies the double entry principle. a) Accrual concept b) Objectivity concept c) Dual concept d) Faithful representation 10) The ............. concept means the inclusion of a degree of caution is needed in making estimates when uncertain of an outcome a) Prudence b) Business Entity c) Understandability d) Verifiability 11) What do we call the concept which assures us that a business will continue into the future a) Accrual b) Materiality c) Relevance d) Going Concern 12) Which name is given to a concept which implies affairs of a business are to be treated as separate from the owner's activities? a) Objectivity b) Business Entity c) Dual Aspect d) Consistency 13) What is the concept which states that transactions of a similar nature should be recorded in the same way in current and future periods? a) Consistency b) Materiality c) Objectivity d) Comparability 14) The ..... states that the effects of transactions are recognised when they occur and are reported in the accounts of the period they relate to a) Relevance b) Accrual concept c) Prudence d) Understandability 15) Which convention means that an item purchased will be treated as expenses or non-current asset according to the size of the organisation and accountants judgement? a) Consistency b) Materiality c) Timeliness d) Comparability 16) Organisations must keep accounting documents for 6 years under which concept? a) Verifiability b) Timeliness c) Comparability d) Accruals

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