Question

Consider the following independent scenarios:
1. Luigi's Pizza has been in business for 25 years. All of its operations are profitable, and the accountants believe that the company will operate into the foreseeable future.
2. A bank used the information presented in Tiger Auto's financial statements to determine if it should extend a $300,000 loan to Tiger. The information in the financial statements made a difference in the bank's lending decision.
3. Jim Furio, manager of Martha's Antiques, does not like to change accounting procedures because it hinders his ability to make year to year comparisons.
4. Lynn Hagood, owner of Jonesboro Animal Hospital, informs his accountant that he does not want to review any accounting issue that is smaller than 1% of net income.
Required
Identify the accounting assumption or qualitative characteristic that relates to each scenario.


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  • CreatedJuly 16, 2015
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