Answered: financial statements for the waiting…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Because of the ongoing community quarantine brought about by COVID-19, there was a drastic reduction in the revenue from vegetable sales. The management decided to wait until the pandemic is over and present financial statements for the waiting period rather than prepare now the traditional twelve-month financial statements. Which of the following statements is true? *

This is a violation of the periodicity assumption.

This supports the going concern assumption.

This is a violation of the monetary unit assumption.

This supports the accrual basis of accounting.

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