Neco 2017 Financial Accounting Question 32

Practice objective / multiple choice question 32 from the 2017 Neco Financial Accounting examination.

Neco 2017 Financial Accounting Objective / Multiple Choice Easy Difficulty
Question 32 NECO • 2017 • FINANCIAL_ACCOUNTING • objective

State the accounting concept that requires expenses to be matched with the revenues they help generate, and give one practical implication of this concept for a manufacturing company.

Answer Options

Correct Answer A. Matching (Accrual) Concept; e.g., production costs are recognised as cost of goods sold in the period the related sales are recognised.
B. Revenue Recognition Concept; e.g., sales are recorded when cash is received, regardless of when the product is delivered.
C. Historical Cost Concept; e.g., inventory is valued at original purchase price even after market price changes.
D. Conservatism Concept; e.g., potential losses are recognised immediately while gains are deferred.
Correct Answer
A
Correct Option:
Matching (Accrual) Concept; e.g., production costs are recognised as cost of goods sold in the period the related sales are recognised.

About This Question

This is Neco 2017 Financial Accounting Question 32. It is one of the objective questions from the 2017 Neco Financial Accounting examination.

Difficulty level: Easy .

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