"E2.6 (LO 3, 4) (Assumptions, Principles, and Constraint) Presented below are the assumptions, principles, and constraint used in this chapter. 1. Economic entity assumption 2. Going concern assumption 3. Monetary unit assumption 4. Periodicity assumption 5. Measurement principle (historical cost) 6. Measurement principle (fair value) 7. Expense recognition principle 8. Full disclosure principle 9. Cost constraint 10. Revenue recognition principle Instructions Identify by number the accounting assumption, principle, or constraint that describes each situation below. Do not use a number more than once. a. Allocates expenses to revenues in the proper period. b. Indicates that fair value changes subsequent to purchase are not recorded in the accounts. (Do not use revenue recognition principle.) c. Ensures that all relevant financial information is reported. d. Rationale why plant assets are not reported at liquidation value. (Do not use historical cost principle.) e. Indicates that personal and business record keeping should be separately maintained. f. Separates financial information into time periods for reporting purposes. g. Assumes that the dollar is the "measuring stick" used to report on financial performance."

"E2.6 (LO 3, 4) (Assumptions, Principles, and Constraint) Presented below are the assumptions, principles, and constraint used in this chapter. 1. Economic entity assumption 2. Going concern assumption 3. Monetary unit assumption 4. Periodicity assumption 5. Measurement principle (historical cost) 6. Measurement principle (fair value) 7. Expense recognition principle 8. Full disclosure principle 9. Cost constraint 10. Revenue recognition principle Instructions Identify by number the accounting assumption, principle, or constraint that describes each situation below. Do not use a number more than once. a. Allocates expenses to revenues in the proper period. b. Indicates that fair value changes subsequent to purchase are not recorded in the accounts. (Do not use revenue recognition principle.) c. Ensures that all relevant financial information is reported. d. Rationale why plant assets are not reported at liquidation value. (Do not use historical cost principle.) e. Indicates that personal and business record keeping should be separately maintained. f. Separates financial information into time periods for reporting purposes. g. Assumes that the dollar is the "measuring stick" used to report on financial performance."

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter9: Auditing The Revenue Cycle.

Section: Chapter Questions

Problem 1RQSC: Refer to Exhibit 9.1. Which accounts are relevant in the revenue cycle? Identify the relationships...

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