Please dont answer if yoy dont know Will give down thumb for

Please don\'t answer if yoy dont know. Will give down thumb for wrong answer.Answer all. Any one not answered means down thumb

3. State the accounting principles inv olved in the following statements (a) Revenue is generally recognised when the earning process is virtually complete and significant risk and rewards has been exchanged (b) Loss by fire is recognised in the period in which it occurs. (c) Accounting policies should not be changed from one period to another. (d) Strike by workers is not directly disclosed in financial statements. (e) Assets are not shown at their liquidation values.

Solution

Answers

a) Revenue Recognition principle which states that revenue is to be recognised when the earning process is virtually complete and significant risk and rewards has been exchanged.

b) Going Concern principle is the reason that huge losses of extra ordinary nature like FIRE are recognised in the period in which it occur so that to know whether the entity will continue to exist in future even after such loss.

c) Principle of consistency states that accounting policies should not be changed from one period to another, so that there can be comparability in the performances.

d) Money Principle or Monetary Unit Principle states that only those transactions can be recorded in financial statements that can expressed in terms of some money value. Strike by workers cannot be expressed in monetary terms in normal practice.

e) Cost concept/principle or Historical Cost principle states that Assets are to be shown and recorded at historical cost and not at their liquidation values.