Assets decrease by $75,000 and
expenses decrease by $75,000
Assets increase by $75,000 and
liabilities increase by $75,000
Question 12. Question :
The principle that (1) requires
revenue to be recognized at the time it is earned, (2) allows
the inflow of assets associated with revenue to be in a form
other than cash and (3) measures the amount of revenue as the
cash plus the cash equivalent value of any non-cash assets
received from customers in exchange for goods or services is
called the:
Going-concern principle
Cost principle
Revenue recognition principle
Objectivity principle
Business entity principle
Question 13. Question :
Which of the following is the
primary purpose of accounting?
To establish a business
To identify, record and communicate
business transactions