Mary owns and operates a fabric shop. Mary needs to borrow money to expand; therefore, she prepared financial statements to present to her banker. Mary recorded the assets of her store at the cost she paid for them 2 years ago rather than when she transferred them to her business this year. Mary has violated which ofthe following principles or concepts? A. Reliability principle B. Separate Entity Assumption C. Going-concern principle D. Stable-monetary-unit concept
Mary owns and operates a fabric shop. Mary needs to borrow money to expand; therefore, she prepared financial statements to present to her banker. Mary recorded the assets of her store at the cost she paid for them 2 years ago rather than when she transferred them to her business this year. Mary has violated which ofthe following principles or concepts? A. Reliability principle B. Separate Entity Assumption C. Going-concern principle D. Stable-monetary-unit concept
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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2. Mary owns and operates a fabric shop. Mary needs to borrow money to expand; therefore, she prepared financial statements to present to her banker. Mary recorded the assets of her store at the cost she paid for them 2 years ago rather than when she transferred them to her business this year. Mary has violated which ofthe following principles or concepts?
A. Reliability principle
B. Separate Entity Assumption
C. Going-concern principle
D. Stable-monetary-unit concept
I'm very confused with the answer to this question, please also explain why the other options are wrong.
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