Question
A company follows the accrual basis of accounting and
recognizes revenue when the goods are dispatched, not when cash is received. However, in its final accounts, it also mentions that revenue is recognized only when it is reasonably certain. Which two accounting concepts does this scenario illustrate, and how do they together ensure the reliability of financial information?Solution
The company recognizes revenue upon dispatch, which reflects the Revenue Recognition principle. However, by waiting until revenue is “reasonably certain,” it applies the Prudence (Conservatism) concept, avoiding overstatement of income. These concepts together help ensure that income is neither overstated nor recognized prematurely.
Read the given sentence to find out whether there are any grammatical/ contextual errors in them. The errors, if any, will be in two of the parts of th...
- Read each sentence to find out whether there is any grammatical error in it. The error, if any, will be in one part of the sentence. Mark the part with the...
Read the following sentence carefully and identify if there is any grammatical error in it. If you find any error, choose the part (A, B, C, or D) cont...
As soon as the TV set (A) / was installed, the quiet (B) / stillness that had existed in (C) / my aunt’s house had vanished. (D) / No Error (E)
The amount of data stored (A)/were so vast that (B)/even if we put a number on it, (C)/it would be beyond our comprehension (D).
Each question in this portion has a sentence with three parts (a), (b) and (c). Read each sentence to find out whether there is any error in a...
Directions: The following sentences are divided into parts. Identify if there is any error in any of the parts. If there is an error, choose the letter...
Were I the President(A)/ I would award(B)/ you a title.(C)/ No error(D)
Identify the segment that contains a grammatical error. If there is no error, select 'No error'.
Einstein was an unusual child with no indication...
Identify the segment in the sentence, which contains the grammatical error.
Each student will have to carry his own lunch on the picnic.
