Accounting theories: Practice Questions

A business owner paid for his daughter's tuition fees using the business's bank account. This transaction was recorded as drawings rather than a business expense.
Which accounting theory is applied here?

On 28 December 2023, a firm received a customer order and cash deposit of \(\$2\,000\) for goods to be manufactured and delivered on 15 January 2024. The firm only recorded the sales revenue on 15 January 2024 when the goods were delivered and ownership was transferred.
Which accounting theory is demonstrated by recording the revenue only in 2024?

Which accounting theory states that accounting information must be supported by verifiable and reliable evidence, such as official receipts and source documents?

A business bought a pack of pens for \(\$4\). Instead of recording the pens as a non-current asset to be depreciated over their useful life, the full amount was immediately treated as an expense in the current period.
Which accounting theory justifies this treatment?

State the accounting theory that requires the personal transactions of an owner to be kept completely separate from the financial transactions of the business.

A company purchased a batch of inventory for \$5,000. At the end of the financial year, the net realisable value of this inventory fell to \$3,800.

Identify the accounting theory applied when valuing this inventory at \$3,800 and state how the reduction in value should be reported in the financial statements.