JAMB Principles of Accounts 2005 Question 2

Question 2

Accounting Concepts and Conventions

The concept that has much influence over asset valuation and income determination is

  1. A.entity
  2. B.realization
  3. C.conservatism
  4. D.matching
Show the answer and explanation

Answer: D (matching)

Explanation

Matching sets each period's expenses against the revenue they helped earn, which decides both profit and which costs are carried forward as assets.