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College of Administrative and Financial Sciences

Assignment 1
Deadline: 8/10/2022@ 23:59
Course Name:Principles of Accounting Student’s Name:
Course Code: ACCT 101

Student’s ID Number:

Semester: 1

CRN:
Academic Year: 1444/1445 H

For Instructor’s Use only
Instructor’s Name:
Students’ Grade: / 15

Level of Marks: High/Middle/Low

Instructions – PLEASE READ THEM CAREFULLY
• The Assignment must be submitted on Blackboard (WORD format only) via allocated
folder.
• Assignments submitted through email will not be accepted.
• Students are advised to make their work clear and well presented; marks may be
reduced for poor presentation. This includes filling your information on the cover page.
• Students must mention question number clearly in their answer.
• Late submission will NOT be accepted.
• Avoid plagiarism, the work should be in your own words, copying from students or
other resources without proper referencing will result in ZERO marks. No exceptions.
• All answered must be typed using Times New Roman (size 12, double-spaced) font.
No pictures containing text will be accepted and will be considered plagiarism).
• Submissions without this cover page will NOT be accepted.
1

Assignment Question(s):

(Marks15)

Q1. On your own words, outline the accounting principles and assumptions and explain
each one.
(Marks5)
Accounting principles and assumptions are the basic rules and guidelines that accountants use
to prepare financial statements. The four main principles are the accrual principle, the going concern
principle, the matching principle, and the materiality principle (Accounting Coach, n.d).
Regardless of when the money is collected or paid, according to the accrual principle, revenue and
costs should be recorded in the period in which they are earned or incurred. This guarantees that a
company's financial statements accurately reflect its financial situation. The following are some
instances of the accrual principle:
1. Rather than when money is received, revenue is recognized when it is earned.
2. Rather than when the money is paid, expenses are recorded when they are incurred.
3. Rather than being valued at its selling price, inventory is recorded at cost.
According to the "going concern" principle, a business will likely remain in operation for some time
to come and won't be liquidated. This presumption permits the accrual basis of accounting, which is
more accurate than the cash basis, to be used by accountants. The following are examples of the going
concern principle:
1. Assets are recorded at their historical cost, not at their current market value.
2. Liabilities are recorded at their present value, not at their historical cost.
3. Companies are assumed to continue operating indefinitely.
The matching principle states that expenses should be matched with the revenues they generate.
This ensures that a company's financial statements give a true picture of its profitability. Below are
some examples of the matching principle:
1. Revenues and expenses are matched in the period in which they are earned or incurred.
2. Expenses are matched with the revenues they generate.
3. Income is matched with the expenses incurred to generate that income.
The materiality princi...