Sarah commenced a small business several years ago. By pausing recording temporarily each year on 30 June to prepare financial statements, she is following the: Question 2 Answer Accounting period concept Historical cost principle Monetary principle Going concern assumption Accounting entity concept
Question
Sarah commenced a small business several years ago. By pausing recording temporarily each year on 30 June to prepare financial statements, she is following the: Question 2 Answer
Accounting period concept
Historical cost principle
Monetary principle
Going concern assumption
Accounting entity concept
Solution 1
Sarah is following the Accounting period concept. This concept implies that businesses should divide their activities into time periods. These periods could be monthly, quarterly, or annually. In Sarah's case, she is dividing her business activities annually, pausing on 30 June each year to prepare financial statements.
Solution 2
Sarah is following the Accounting period concept. This concept implies that businesses should divide their activities into time periods. These periods could be monthly, quarterly, or annually. In Sarah's case, she is dividing her business activities annually, pausing on 30 June each year to prepare financial statements.
Similar Questions
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