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Which concepts work together for income measurement and recognition of assets and liabilities?
- a)Cost, going Concern and Realization
- b)Cost, Accrual and Matching
- c)Accrual, Matching and Periodicity
- d)Going Concern, Periodicity and Realization
Correct answer is option 'C'. Can you explain this answer?
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Which concepts work together for income measurement and recognition of...
Accrual, Matching and Periodicity concepts work together for income measurement and recognition of assets and liabilities.
Accrual Concept:
The accrual concept is an accounting principle which states that revenue and expenses should be recognized in the period in which they are earned or incurred, irrespective of the timing of the receipt or payment of cash. This means that revenue should be recognized when it is earned, and expenses should be recognized when they are incurred.
Matching Concept:
The matching concept is an accounting principle which states that expenses should be matched with the revenue they help to generate, i.e. expenses should be recognized in the same period in which the revenue they help to generate is recognized. This ensures that the income statement reflects the true profitability of the business.
Periodicity Concept:
The periodicity concept is an accounting principle which states that the life of a business can be divided into artificial time periods, and financial statements should be prepared for each period. This enables stakeholders to assess the financial performance of the business over a specific period of time.
How these concepts work together:
The accrual concept and matching concept ensure that revenue and expenses are recognized in the period in which they are earned or incurred, and are matched appropriately to give a true picture of the business' profitability. The periodicity concept ensures that financial statements are prepared for each period, which enables stakeholders to assess the financial performance of the business over a specific period of time.
Together, these concepts work to ensure that income is measured accurately, and assets and liabilities are recognized appropriately in the financial statements.
Accrual Concept:
The accrual concept is an accounting principle which states that revenue and expenses should be recognized in the period in which they are earned or incurred, irrespective of the timing of the receipt or payment of cash. This means that revenue should be recognized when it is earned, and expenses should be recognized when they are incurred.
Matching Concept:
The matching concept is an accounting principle which states that expenses should be matched with the revenue they help to generate, i.e. expenses should be recognized in the same period in which the revenue they help to generate is recognized. This ensures that the income statement reflects the true profitability of the business.
Periodicity Concept:
The periodicity concept is an accounting principle which states that the life of a business can be divided into artificial time periods, and financial statements should be prepared for each period. This enables stakeholders to assess the financial performance of the business over a specific period of time.
How these concepts work together:
The accrual concept and matching concept ensure that revenue and expenses are recognized in the period in which they are earned or incurred, and are matched appropriately to give a true picture of the business' profitability. The periodicity concept ensures that financial statements are prepared for each period, which enables stakeholders to assess the financial performance of the business over a specific period of time.
Together, these concepts work to ensure that income is measured accurately, and assets and liabilities are recognized appropriately in the financial statements.
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Which concepts work together for income measurement and recognition of...
In accrual basis transaction, matching principles ,match debit and credit balance, periodically means financial or calendar year
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Which concepts work together for income measurement and recognition of assets and liabilities?a)Cost, going Concern and Realizationb)Cost, Accrual and Matchingc)Accrual, Matching and Periodicityd)Going Concern, Periodicity and RealizationCorrect answer is option 'C'. Can you explain this answer?
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Which concepts work together for income measurement and recognition of assets and liabilities?a)Cost, going Concern and Realizationb)Cost, Accrual and Matchingc)Accrual, Matching and Periodicityd)Going Concern, Periodicity and RealizationCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which concepts work together for income measurement and recognition of assets and liabilities?a)Cost, going Concern and Realizationb)Cost, Accrual and Matchingc)Accrual, Matching and Periodicityd)Going Concern, Periodicity and RealizationCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which concepts work together for income measurement and recognition of assets and liabilities?a)Cost, going Concern and Realizationb)Cost, Accrual and Matchingc)Accrual, Matching and Periodicityd)Going Concern, Periodicity and RealizationCorrect answer is option 'C'. Can you explain this answer?.
Which concepts work together for income measurement and recognition of assets and liabilities?a)Cost, going Concern and Realizationb)Cost, Accrual and Matchingc)Accrual, Matching and Periodicityd)Going Concern, Periodicity and RealizationCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which concepts work together for income measurement and recognition of assets and liabilities?a)Cost, going Concern and Realizationb)Cost, Accrual and Matchingc)Accrual, Matching and Periodicityd)Going Concern, Periodicity and RealizationCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which concepts work together for income measurement and recognition of assets and liabilities?a)Cost, going Concern and Realizationb)Cost, Accrual and Matchingc)Accrual, Matching and Periodicityd)Going Concern, Periodicity and RealizationCorrect answer is option 'C'. Can you explain this answer?.
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Which concepts work together for income measurement and recognition of assets and liabilities?a)Cost, going Concern and Realizationb)Cost, Accrual and Matchingc)Accrual, Matching and Periodicityd)Going Concern, Periodicity and RealizationCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for Which concepts work together for income measurement and recognition of assets and liabilities?a)Cost, going Concern and Realizationb)Cost, Accrual and Matchingc)Accrual, Matching and Periodicityd)Going Concern, Periodicity and RealizationCorrect answer is option 'C'. Can you explain this answer? has been provided alongside types of Which concepts work together for income measurement and recognition of assets and liabilities?a)Cost, going Concern and Realizationb)Cost, Accrual and Matchingc)Accrual, Matching and Periodicityd)Going Concern, Periodicity and RealizationCorrect answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
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