Account True False[1 Marks ]

Materiality principle is an exception to the ‘Full Disclosure Convention'.

All items or facts whether material or immaterial are recorded in accounting.

If a firmi adopts different accounting principles in two accounting periods it conflicts with the concept of consistency.

The essence of convention of prudence is to anticipate no profit and provide for all possible losses.

Revenues are matched with expenses in accordance with going concern assumption.

Only those facts and events are recorded in accounting which are capable of being expressed in terms of money.

Convention of Prudence results in understatement of profits and assets and overstatement of liabilities.

Entire life of the firm is divided into time intervals for the measurement of profits in accordance with ‘Going Concern Assumption'.

Assets will be equal to capital if there are no liabilities.

Business entity concept is not applicable to sole trading concerns and partnership concerns.