Gce Model Questions Vol1 2018 Financial Accounting Question 34

Practice objective / multiple choice question 34 from the 2018 Gce Model Questions Vol1 Financial Accounting examination.

Gce Model Questions Vol1 2018 Financial Accounting Objective / Multiple Choice Easy Difficulty
Question 34 GCE_MODEL_QUESTIONS_VOL1 • 2018 • FINANCIAL_ACCOUNTING • objective

Company X prepares its financial statements on a cash basis, recording revenue only when cash is received, even though services are performed before receipt. Which accounting concept is being violated, and what is the effect on the comparability of its financial statements across periods?

Answer Options

A. Conservatism concept; it has no impact on comparability of the financial statements across periods.
B. Matching concept; it reduces comparability of the financial statements across periods.
C. Cash basis concept; it improves comparability of the financial statements across periods.
Correct Answer D. Accrual (revenue‑recognition) concept; it reduces comparability of the financial statements across periods.
Correct Answer
D
Correct Option:
Accrual (revenue‑recognition) concept; it reduces comparability of the financial statements across periods.

About This Question

This is Gce Model Questions Vol1 2018 Financial Accounting Question 34. It is one of the objective questions from the 2018 Gce Model Questions Vol1 Financial Accounting examination.

Difficulty level: Easy .

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