Question

Wymas
Q1. a) "While cash-based accounting can give a point-in-time picture of the business cash flow.
accrual-based accounting offers a more accurate picture of the longer-term state of the
business". Explain and elaborate the statement in light of differences between the two methods
of accounting
Q1. b) State giving reasons, whether each of the following statements is 'True' or 'False"
1. Since the life of the firm is assumed to be indefinite the going concern concept
provides that income statement should be prepared only when the firm is dissolved
2. In accounting, all business transactions are recorded according to dual concept.
3. Revenues should be recorded as early as possible and expenses as late as possible.
4.
Consistency convention emphasizes that: "Anticipate no profits but provide for all
losses."
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Answer 1

Answer:

While cash-based accounting can give a point-in-time picture of the business cash flow.

accrual-based accounting offers a more accurate picture of the longer-term state of the

business". Explain and elaborate the statement in light of differences between the two methods

of accounting

Q1. b) State giving reasons, whether each of the following statements is 'True' or 'False"

1. Since the life of the firm is assumed to be indefinite the going concern concept

provides that income statement should be prepared only when the firm is dissolved

2. In accounting, all business transactions are recorded according to dual concept.

3. Revenues should be recorded as early as possible and expenses as