Match the terms in Column A with their descriptions in Column B.

This question asks you to match the accounting concepts in Column A with their descriptions in Column B.

• 1.1.1 Business entity

  • This concept states that the business is separate from its owner. Therefore, only transactions related to the business are recorded, not the owner's personal transactions. This matches description B.

• 1.1.2 Matching

  • The matching concept requires that expenses be recorded in the same accounting period as the revenues they helped generate. This matches description D.

• 1.1.3 Materiality

  • Materiality dictates that only information significant enough to influence a user's economic decisions should be recorded and disclosed. This matches description E.

• 1.1.4 Historical cost

  • The historical cost principle states that assets should be recorded at their original purchase price. This matches description A.

• 1.1.5 Going concern

  • The going concern assumption means that a business is expected to continue operating indefinitely into the foreseeable future. This matches description C.

Here are the matches:

• 1.1.1: B
• 1.1.2: D
• 1.1.3: E
• 1.1.4: A
• 1.1.5: C