Match the situation with the best term to explain why things are done this way.
1. Every year a business uses the same account names so it can evaluate results between years.
2. When we prepare a financial statement, we show all assets at the price we paid for them.
3. A business should not spend $1,000 on counting and recounting $500 worth of inventory.
4. If we record a truck on the financial statement at the price we could get for it if we tried to sell it quickly, we are violating this accounting assumption.
5. We try to include information in the accounting records such that financial statements provide enough information for readers to make an investment decision.
6. A car dealership will report profits for the parts department separate from the service department so that senior management can see how well each part of their business is doing.
a. Historic cost principle
b. Going concern assumption
c. Relevance characteristic
d. Cost-benefit constraint
e. Economic entity assumption
f. Comparability characteristic