Consider the following statements.
1. The entity concept of accounting is not applicable to sole trading concerns and partnership concerns.
2. Assets are to be shown in the balance sheet at their replacement cost on liquidation.
3. Money measurement concept takes into account changes in the value of monetary unit.
4. When a creditor is paid, this results in decrease of one asset and a corresponding increase in other asset.
Which of the statements given above are correct?
A. Both 1 and 2
B. Both 2 and 3
C. Both 3 and 4
D. None of the above
Answer: Option D
Related Questions on Accounting
Accounting provides information on
A. Cost and income for managers
B. Company's tax liability for a particular year
C. Financial conditions of an institutions
D. All of the above
The long term assets that have no physical existence but are rights that have value is known as
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
The assets that can be converted into cash within a short period (i.e. 1 year or less) are known as
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
Patents, Copyrights and Trademarks are
A. Current assets
B. Fixed assets
C. Intangible assets
D. Investments
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