Observation

Majority of the candidates attempted this question and the performance was quite impressive as most of them provided appropriate answers to the questions.

Some of the suggested answers are:
(a)        Business entity: this concept states that a business is a body separate from the owner(s) who have economic, financial or proprietary interest in it.
OR
This concept states that accounting is concerned with a business unit as distinct from the owner and therefore only business transactions are entered in the books of account.

            (b)       Going concern: this concept assumes that the business is going to operate for an indefinite period of time.
OR
This concept assumes that the business will continue in operational existence for
a foreseeable future period.

            (c)       Accrual: this concept states that revenues and expenses are recognized and included in the accounts as they are earned and incurred and not as they are paid or received.

            (d)       Historical cost: this concept states that the value of an asset is determined by the cost of its acquisition and not by the value of returns which are expected to be earned.

            (e)       Money measurement: this concept states that money is the basis of recognition for financial transactions and so, only transactions capable of being expressed in
monetary terms are recorded in the books of accounts.