Identify the basic assumption, accounting principle, or constraint that applies to each statement. See bottom for list of choices. Also Circle OK or NOT OK. Choose Not OK if the explanation violates the assumption, principle or constraint. (10 points):

1. Wagner Corporation adjusted the value of all assets and liabilities to reflect changes in the purchasing power of the dollar, Wagner uses the current rate of inflation as a guide.

OK NOT OK Assumption/Principle: ______________________

2. Maui Jims, Inc., provides financial statements quarterly and annually.

OK NOT OK Assumption/Principle: ______________________

3. Penn Company lists land on its balance sheet at $120,000, its original purchase price, even though the land has a current fair value of $300,000.

OK NOT OK Assumption/Principle: ______________________

4. Cypress Inc. records revenue when products are delivered to customers, even though the cash has not yet been received.

OK NOT OK Assumption/Principle: ______________________

5. Gigantic Corporation purchased two small calculators at a cost of $32.00. The cost of the calculators was expensed even though they had a three-year estimated useful life.

OK NOT OK Assumption/Principle: ______________________

Choices:

Comparability

Matching principle

Periodicity

Materiality

Neutral

Verifiability

Relevance

Historical cost

Going Concern

Monetary Unit

Revenue Recognition

Present Value