Match the explanations in column A to the concepts in column B by writing the correct letter next to the correct question number.

Here are the matches for the explanations in Column A to the concepts in Column B: 1. The financial statements of a business are prepared as if the business will continue trading in the foreseeable future. This describes the Going concern concept*, which assumes a business will continue to operate for an indefinite period. 1. C 2. A business trading in MP3 players will show the value in the books at the cost price of R350 each, even if it is planning to sell each player at R600. This illustrates the Prudence concept* (conservatism), which dictates that assets and income should not be overstated. Valuing inventory at cost, even if the selling price is higher, avoids anticipating profits. 2. E 3. If a business purchased a building three years ago at R600 000 and its worth R900 000 today, it will still be shown at the value of R600 000 in the business's statements. This is an example of the Historical cost concept*, where assets are recorded at their original purchase price. 3. D 4. The telephone account at the end of February 2017 is still payable. This will be added to the Telephone account before closing it off to the Profit and Loss account. This demonstrates the Matching concept*, which requires expenses to be recognized in the same accounting period as the revenues they helped generate, regardless of when cash is paid. 4. B 5. Consumable, postage and bank charges can all be posted to one account called Sundry expenses. This applies the Concept of materiality*, where items that are not individually significant can be grouped together. 5. A Here is the summary of the matches: 1. C 2. E 3. D 4. B 5. A Send me the next one 📸