Exercise 1-7 Identifying accounting principles and assumptions LO C4 Match each of the numbered descriptions with the principle or assumption it best reflects. UUTUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU Principle/Assumption Description 1. A company reports details behind financial statements that would impact users' decisions. 2. Financial statements reflect the assumption that the business continues operating. 3. A company records the expenses incurred to generate the revenues reported. Derived from long-used and generally accepted accounting practices such as the concepts, assumptions, and guidelines for preparing the financial statements. 5. Each business is accounted for separately from its owner or owners. Revenue is recorded when products and services are delivered. 7. Usually created by a pronouncement from an authoritative body. 6. | 8. Information is based on actual costs incurred in transactions. TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT TTTTTTTT Principle/Assumption ns. Business entity assumption Cost principle Full disclosure principle General accounting principle