Practice Accrual Concept (15.3.9) - Accounting Principles and Concepts

Practice: Accrual Concept

Lesson 15.3.9Accounting Principles and Concepts

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9 questions

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Quiz
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6 sample questions

Question 1.
Define the Accrual Concept in accounting.
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Think about when transactions actually occur.
Question 2.
What is the primary difference between Accrual Accounting and Cash Basis Accounting?
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Consider the timing of recording transactions.
3Question 3.
What does the Accrual Concept in accounting state?
- Revenues are recognized when cash is received
- Revenues are recognized when earned
- Expenses are recorded at year-end
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Think about when transactions are actually recognized.
4Question 4.
In accrual accounting, when is expense recognized?
- True
- False
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Consider the timing of expense recognition.
Question 5.
A freelancer completes a graphic design project in October worth ₹80,000 and sends the invoice, but the payment is received in December. How should this be recorded?
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Identify the completion date of the service and apply the accrual concept.
Question 6.
A company pays an annual insurance premium of ₹24,000 in January for coverage that runs through December. How should this be reported in each month’s financial statements?
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Remember to spread costs over the period they're applicable.

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