Q4: Presented below are the basic assumptions and principles underlying financial statements. a. Historical cost principle b. Economic entity assumption c. Full disclosure principle d. Going concerm assumption e. Monetary unit assumption f. Periodicity assumption Identify the basic assumption or principle that is described below. 1. The economic life of a business can be divided into artificial time periods. 2. The business will continue in operation long enough to carry out its existing objectives. 3. Assets should be recorded at their cost. - 4. Economic events can be identified with a particular unit of accountability. 5. Circumstances and events that make a difference to financial statement users should be disclosed. 6. Only transaction data that can be expressed in terms of money should be included in the accounting records.
Q4: Presented below are the basic assumptions and principles underlying financial statements. a. Historical cost principle b. Economic entity assumption c. Full disclosure principle d. Going concerm assumption e. Monetary unit assumption f. Periodicity assumption Identify the basic assumption or principle that is described below. 1. The economic life of a business can be divided into artificial time periods. 2. The business will continue in operation long enough to carry out its existing objectives. 3. Assets should be recorded at their cost. - 4. Economic events can be identified with a particular unit of accountability. 5. Circumstances and events that make a difference to financial statement users should be disclosed. 6. Only transaction data that can be expressed in terms of money should be included in the accounting records.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Q4:
Presented below are the basic assumptions and principles underlying financial statements.
a. Historical cost principle
b. Economic entity assumption
c. Full disclosure principle
d. Going concern assumption
e. Monetary unit assumption
f. Periodicity assumption
Identify the basic assumption or principle that is described below.
1. The economic life of a business can be divided into artificial time periods.
2. The business will continue in operation long enough to carry out its existing objectives.
3. Assets should be recorded at their cost.
4. Economic events can be identified with a particular unit of accountability.
5. Circumstances and events that make a difference to financial statement users should
be disclosed.
6. Only transaction data that can be expressed in terms of money should be included in
the accounting records.
Ans: N/A, LO: 3. Bloom: K, Dificulty. Easy, Min: 5, AACSB: None, AICPA BB: Governance Perspective, AICPA FC: Reporting. AICPA PC: None, IMA:
Reporting
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