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. 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.
(Note: Do not use the cost principle.)
_______ (b) Indicates that personal and business record-keeping should be separately
maintained.
_______ (c) Assumes that the dollar 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.