Question

Fill ups
1) Surplus of income over expenses is _______.
2) Accounts must be honestly prepared and they must disclose all material information is known as______.
3) _______ means reputation of a business valued in terms of money.

Answer 1

Answer:

Explanation:1-profit

2-Materiality concept/Disclosure

3-Goodwill

Answer 2

1) Answer:

Profit.

2) Answer:

Convention of disclosure.

Explanation:

This type of convention requires full disclosure of record of material information, however, it excludes immaterial information. The purpose is to provide all the important financial information and records for creditors, investors and proprietors.

3) Answer:

Goodwill.

Explanation:

It is the intangible asset acquired when one company is purchased by the other company or business entity. If the purchasing company pays more money that exceeds any the collective price of liabilities, intangible and tangible assets, then the surplus is goodwill.