Accounting principles 2023 exam study
guide questions and answers
GAAP - answer Generally accepted accounting principles
IFRS - answer International financial reporting standards
ASPE - answer Accounting standards for private enterprise
Qualitative characteristics - answer Relevance, reliability, understandability and comparability
Relevance - answer All information useful for decision making is present in the financial
statements. Helps users predict future performance or confirm previous predictions
Reliability - answer Information is free from significant error and bias
Understandability - answer The financial information can be reasonably understood by its users
if the users have knowledge of the business and a basic knowledge of accounting
Comparability - answer The financial statements of a company must be prepared in a similar
way year after year
Business entity assumption - answer States that accounting for a business must be kept
separate from the personal affairs of its owner of any other business
Going concern assumption - answer Assumes that a business will continue to operate into the
foreseeable future
guide questions and answers
GAAP - answer Generally accepted accounting principles
IFRS - answer International financial reporting standards
ASPE - answer Accounting standards for private enterprise
Qualitative characteristics - answer Relevance, reliability, understandability and comparability
Relevance - answer All information useful for decision making is present in the financial
statements. Helps users predict future performance or confirm previous predictions
Reliability - answer Information is free from significant error and bias
Understandability - answer The financial information can be reasonably understood by its users
if the users have knowledge of the business and a basic knowledge of accounting
Comparability - answer The financial statements of a company must be prepared in a similar
way year after year
Business entity assumption - answer States that accounting for a business must be kept
separate from the personal affairs of its owner of any other business
Going concern assumption - answer Assumes that a business will continue to operate into the
foreseeable future
