Presented below are the assumptions and principles discussed in this chapter. 1. Full disclosure principle. 2. Going
Question:
Presented below are the assumptions and principles discussed in this chapter.
1. Full disclosure principle.
2. Going concern assumption.
3. Monetary unit assumption.
4. Time period assumption.
5. Historical cost principle.
6. Economic entity assumption.
Instructions
Identify by number the accounting assumption or principle that is described below. Do not use a number more than once.
_______ (a) Is the rationale for why plant assets are not reported at liquidation value.
_______ (b) Indicates that personal and business record keeping should be separately maintained.
_______ (c) Assumes that the monetary unit is the “measuring stick” used to report on financial performance.
_______ (d) Separates financial information into time periods for reporting purposes.
_______ (e) Measurement basis used when a reliable estimate of fair value is not available.
_______ (f) Dictates that companies should disclose all circumstances and events that make a difference to financial statement users.
LiquidationLiquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due....
Step by Step Answer:
Accounting Principles
ISBN: 978-1118875056
12th edition
Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso