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WAEC Financial Accounting 2016 Question 12

Question 12

Accounting Concepts and Conventions

In the preparation of the Trading Account of Omuya Ltd., the company included credit sales of ₦18,000 made during the year. The concept guiding this treatment is the

  1. A.materiality concept.
  2. B.dual aspect concept.
  3. C.matching concept.
  4. D.money measurement concept.
Show the answer and explanation

Answer: C (matching concept.)

Explanation

Sales made in the year are counted in that year's revenue whether or not cash has been received, so revenue is matched to the period (accruals/matching).