Preparing financial statements on the basis of recognising when they occur, rather than on the timing of receipts and payments, is referred to as:

Group of answer choices

1, cash accounting

2, financial accounting

3, management accounting

4, accrual accounting

Choose the best response. When determining whether an item of expenditure is material, the following must be considered:

Group of answer choices

1 whether its non- disclosure could have an impact on user's decision making

2 the size and/or nature of the expenditure

3 all of the above options must be considered

4 whether a related asset has been impaired

An entity's financial year ends on 30 June. On 1 May it paid a 12 month insurance premium of $24,000. Under the accrual system of accounting how much of the premium will be recognised as an expense for the current year ended 30 June and how much will be treated as an asset (prepaid insurance)?

Group of answer choices

1, $6,000 expense and $18,000 prepaid insurance

2, $20,000 expense and $4,000 prepaif insurance

3, $4,000 expense and $20,000 prepaid insurance

4, $12,000 expenses and $12,000 prepaid insurance

Preparing financial statements on the basis of recognising when they occur, rather than on the timing of receipts and payments, is referred to as:

Group of answer choices

1 cash accounting

2 financial accounting

3 management accounting

4 accrual accounting

An entity pays wages on a fortnightly basis and the next payroll date is 8 July. If wages expense is not accrued at 30 June the effect on the financial statements for June will be:

Group of answer choices

1 an overstatement of assets and profit

2 an understatement of liabilities and an overstatement of profit

3 an overstatement of liabilities and an understatement of profit

4 an understatement of assets and profit

1 dont need explanation. Please answer fast