*F/ACCOUNTING ANSWERS* POWERED BY MR LUKE* _VIP GR | WASSCE HEADQUARTERS

*F/ACCOUNTING ANSWERS*

POWERED BY MR LUKE*

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*(1a)*
Accounting concept refers to the basic assumptions and rules and principles which work as the basis of recording of business transactions and preparing accounts. This concept assumes that, for accounting purposes, the business enterprise and its owners are two separate independent entities.



*(B)*

(i) business entity is an organization created by an individual or individuals to conduct business, engage in a trade or partake in similar activities.
It could also be defined as organizations formed by one or more persons. Since they are formed at the state level, they must comply with state laws. In most states, a business owner is required to file documents with a particular state agency, like the office of the Secretary of State, in order to legally set up their business.



(ii)Accrual accounting is an accounting method where revenue or expenses are recorded when a transaction occurs rather than when payment is received or made. The method follows the matching principle, which says that revenues and expenses should be recognized in the same period.


(iii)Going concern describes a company which can continue operating without the significant threat of liquidation, and therefore remain in business for the foreseeable future.


(iv)consistency implies that once you adopt an accounting principle or method, continue to follow it consistently in future accounting periods so that the results reported from period to period are comparable.

(V)Prediocity implies that organization can report its financial results within certain designated periods of time. This typically means that an entity consistently reports its results and cash flows on a monthly, quarterly, or annual basis



(Vi) A historical cost is a measure of value used in accounting in which the value of an asset on the balance sheet is recorded at its original cost when acquired by the company.

Historical cost is a calculation of the value used in the accounting process, in which the asset's value on the balance sheet is reported at its original cost as purchased by the corporation


*MR LUKE*