Accounting Principles 14TH Edition BY
JERRY J Exam Prep a PLUS Business
Questions and Answers Verified Solutions
Latest Update 2026/2027
Question:
Business Entity Assumption.
Answer:
Means that a business is accounted for separately from other business entities, including its owner.
Question:
Comparability.
Answer:
Different companies may use different accounting methods, there is still sufficient basis for valid
comparison
Question:
Conservatism constraint.
Answer:
Select the accounting method that is least likely to overstate revenue and understate expenses
Question:
Consistency constraint.
Answer:
Must use the same accounting method for all events
Question:
, Cost-benefit relationship constraint.
Answer:
Ensure financial information is beneficial enough to justify the cost of preparing it
Question:
Economic entity assumption.
Answer:
An organization stands apart from other organizations and individuals as a separate economic unit
Question:
Expense recognition principle (matching principle).
Answer:
Prescribes that a company record the expenses it incurred to generate the revenue reported.
Question:
Faithful representation.
Answer:
Information must be truthful; complete, neutral, and free from error
Question:
Full disclosure principle.
Answer:
Prescribes that a company report the details behind financial statements that would impact users'
decisions. (Typically found in the footnotes to the statements.)
Question:
Generally Accepted Accounting Principles (GAAP).
Answer:
JERRY J Exam Prep a PLUS Business
Questions and Answers Verified Solutions
Latest Update 2026/2027
Question:
Business Entity Assumption.
Answer:
Means that a business is accounted for separately from other business entities, including its owner.
Question:
Comparability.
Answer:
Different companies may use different accounting methods, there is still sufficient basis for valid
comparison
Question:
Conservatism constraint.
Answer:
Select the accounting method that is least likely to overstate revenue and understate expenses
Question:
Consistency constraint.
Answer:
Must use the same accounting method for all events
Question:
, Cost-benefit relationship constraint.
Answer:
Ensure financial information is beneficial enough to justify the cost of preparing it
Question:
Economic entity assumption.
Answer:
An organization stands apart from other organizations and individuals as a separate economic unit
Question:
Expense recognition principle (matching principle).
Answer:
Prescribes that a company record the expenses it incurred to generate the revenue reported.
Question:
Faithful representation.
Answer:
Information must be truthful; complete, neutral, and free from error
Question:
Full disclosure principle.
Answer:
Prescribes that a company report the details behind financial statements that would impact users'
decisions. (Typically found in the footnotes to the statements.)
Question:
Generally Accepted Accounting Principles (GAAP).
Answer:
