Generally Accepted Accounting Principles $($GAAP$)$

From the list below, identify the accounting assumption, principle, or constraint that describes each situation below. Do not use any accounting assumption, principle or constraint more than once. Write the letter beside each principle, assumption or constraint.

Principles Assumptions Constraints

Answer

$($See options below$)$

Historical Cost H

Economic Entity B

Materiality E

Full Disclosure C

Going Concern I

Conservatism A

Matching G

Monetary Unit D

Revenue Recognition J

Time Period Assumption F

a$)$ When choosing between two options, the one least likely to overstate assets or revenue is selected.

b$)$ Indicates that personal and business record$-$keeping should be separately maintained.

c$)$ Ensures that all information relevant to financial decision$-$making is reported.

d$)$ Assumes that the dollar is the appropriate $$measuring stick$$ for reporting on financial performance.

e$)$ Requires that the accounting guidelines be followed for significant items.

f$)$ Separates financial information into time periods for reporting purposes.

g$)$ Requires recognition of expenses in the same period as related revenues.

h$)$ Indicates that market value changes after a purchase are not recorded in the accounts.

i$)$ The rationale for why capital assets are capitalized and depreciated.

j$)$ Revenue is recognized as soon as a product has been sold or a service performed, regardless of when the money is actually received.