11 mark
Azaf, a trader, records assets in his ledger using the price he paid for them.
Which accounting principle is he applying?
prudence
materiality
matching
historic cost
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Accounting Principles & Policies (Cambridge (CIE) IGCSE Accounting)
Exam Questions
12 mins12 questions21 mark
A restaurant owner made no entry in her accounts when the business received a good rating from a customer.
Which accounting principle was applied?
money measurement
historic cost
going concern
realisation
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31 mark
Azaf is an accountant. When he prepares financial statements he makes sure that they are clearly presented and he assumes that the users of these statements will have a reasonable knowledge of accounting.
Which accounting policy is Azaf is applying?
comparability
relevance
reliability
understandability
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41 mark
Which accounting policy requires that the information in financial statements is useful for making financial decisions for the future?
comparability
money measurement
relevance
reliability
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51 mark
Jamie is the owner of a business.
Jack opens up a rival business in the same town as Jamie. Jamie knows that this will affect his sales but did not record this in his accounting records.
Which accounting principle is Jamie applying?
consistency
duality
money measurement
prudence
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61 mark
Each year, Mariam uses the reducing balance method to depreciate her vehicles.
Which accounting principle is Mariam observing?
consistency
duality
historic cost
realisation
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71 mark
An ice cream business purchases a cheap calculator during the financial year.
Why would the ice cream business not include the value of the calculator in the statement of financial position?
It was unused.
It was used regularly.
It was of very low monetary value.
It was purchased using cash.
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11 mark
Sofia, a credit customer of a trader, is unable to pay their invoice. The trader decides to write off the balance as an irrecoverable debt.
The trader makes a credit entry in Sofia's account and a debit entry in the irrecoverable debts account.
Which accounting principles are being applied?
duality and realisation
duality and prudence
prudence and realisation
historic cost and matching
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21 mark
A business withdraws $5 000 from the business bank account to buy a vehicle for personal use.
In the ledger, a debit entry was made in the drawings account and a credit entry was made in the bank account.
Which accounting principles were being applied?
prudence and duality
duality and business entity
business entity and matching
matching and prudence
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31 mark
Halina started a business and transferred $10 000 from her personal bank account into a business bank account.
This transaction was debited to the business bank account and credited to the capital account.
Which accounting principles did she apply?
duality and business entity
going concern and business entity
duality and materiality
going concern and materiality
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41 mark
Jill is a shareholder in a company. She received the company’s financial statements.
Why did she find the financial statements reliable?
The information was presented clearly in the financial statements.
The layout was similar to last year's financial statements.
She was confident that the financial statements did not contain errors.
The financial statements were produced within a week of the end of the financial year.
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51 mark
Which of the following statements refers to the accounting principle of realisation?
Only monetary information is recorded in the accounting records.
Purchases of very low-cost equipment are treated as expenses rather than non-current assets.
It is assumed that the business will continue to operate in the foreseeable future.
Revenue should only be regarded as earned when the legal title of goods and services passes from the seller to the buyer.
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