Review the statements given below. Each statement represents one of the key assumptions of the accounting model. Identify which assumption is applicable and describe your response. Account Assumptions Accrual Conservatism Consistency Economic Entity Going Concern Relevance/Reliability Time Period Gurney Reporting is involved in a patent lawsuit. Gurney is suing Archobold Bros. for patent infringement.

Gurney is expecting to win a large settlement in the case. Since the settlement award is not certain, no transaction is posted in the financial statements.

Twilight Technologies purchases an insurance policy to insure the life of the CFO. The policy covers 12 months and will be in effect starting January 1 of the following year. Twilight Technologies records the policy on the balance sheet at the time of purchase.

Roote Technologies manufactures a product known as SuperChip. Suddenly, the government imposes a restriction on the manufacture, import, export, marketing and sale of this product in the country. SuperChip is the only product that Roote Technologies manufactures.