Practice Important Accounting Conventions - 15.4 | 15. Accounting Principles and Concepts | Management 1 (Organizational Behaviour/Finance & Accounting)
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15.4 - Important Accounting Conventions

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

Explain the conservatism principle in accounting.

💡 Hint: Think about how this principle protects stakeholders.

Question 2

Easy

What does consistency in accounting ensure?

💡 Hint: Consider why changes in methods could be problematic.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What does the conservatism principle require companies to do?

  • Recognize all profits immediately
  • Anticipate no profit but provide for potential losses
  • Ignore potential losses

💡 Hint: Think about how businesses protect themselves.

Question 2

True or False: The consistency principle allows companies to change their accounting methods as needed without any consequences.

  • True
  • False

💡 Hint: Consider the impacts of changing methods on comparability.

Solve and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A company has been using straight-line depreciation for its assets. They are considering switching to declining balance depreciation. What steps should they take to comply with the consistency principle?

💡 Hint: Think about how changes require transparency and communication.

Question 2

When assessing whether to report an expense, how can a company determine if the expense is material?

💡 Hint: Consider the potential decision-making impact of the number on stakeholders.

Challenge and get performance evaluation