Fundamentals of Accountancy, Business and Management 1 Consultants should record the revenue when? December 25 or January 5? And what principle encompasses it? 3. A business with a Php 10,000 capital should report an expense amounting to Php 100 while a company having a 10 billion pesos capital does not need to report Php 100 expenses based on what principle? 4. Mr. Sam owns a company. He uses two different credit cards - one for the payment of business expenses and one for the payment of personal expenses. What concept in accounting does he follow? 5. The Metro company purchased a tract of land for Php 800,000 in 2005. Because of inflation, the worth of the tract of land is now 1,000,000. The Metro company cannot adjust its balance sheet because of what principle of accounting? 6. The Lasani Stone Crushing Company purchased a piece of equipment for Php 10,000 several years ago. Today, the worth of equipment is only Php 2,500 but the company would still report it at original cost less accumulated depreciation. What is their basis for doing such? 7. XYZ company was using straight line method for depreciation of asset for the past 5 years. One of the directors of the company propose to changed it to double declining balance method. You reject the proposal of the director. What will be the reason for the rejection of the proposal? 8. A company buys vans from a bank under a lease agreement for the purposes of transport. Under that agreement, the company will have to pay some advance and will pay the remaining amount for vans in 4-year installments. Now although after paying the advance, bank will provide the company with the possession of the vans and company will own those vans from an "economic point of view", but it will not be recognized as the "legal owner" of those vans until it pays the final installment. 9. You start a business having a thought of it will indefinitely continue because of what principle in accounting? 10. The company should use a fix account title or follow the standards they use from the first year to succeeding year. What principle of accounting told them to do so