Accounting Principles and Assumptions
The following basic accounting principles and assumptions were discussed in the chapter:
Economic entity
Monetary unit
Cost principle
Going concern
Time period
Fill in each of the blanks with the accounting principle or assumption that is relevant to the situation described.
________________________________ 1. Genesis Corporation is now in its 30th year of business. The founder of the company is planning to retire at the end of the year and turn the business over to his daughter.
________________________________ 2. Nordic Company purchased a 20-acre parcel of property on which to build a new factory. The company recorded the property on the records at the amount of cash given to acquire it.
________________________________ 3. Jim Bailey enters into an agreement to operate a new law firm in
________________________________ 4. Multinational Corp. has a division in Japan. Prior to preparing the financial statements for the company and all of its foreign divisions, Multinational translates the financial statements of its Japanese division from yen to U.S. dollars.
________________________________ 5. Camden Company has always prepared financial statements annually, with a year-end of June 30. Because the company is going to sell its stock to the public for the first time, quarterly financial reports will also be required by the SEC.
Trending nowThis is a popular solution!
Chapter 1 Solutions
Financial Accounting: The Impact on Decision Makers
- Financial accounting questionarrow_forwardMarilyn Terrill is the senior auditor for the audit of Uden Supply Company for the year ended December 31, 20X4. In planning the audit, Marilyn is attempting to develop expectations for planning analytical procedures based on the financial information for prior years and her knowledge of the business and the industry, including these: 1. Based on economic conditions, she believes that the increase in sales for the current year should approximate the historical trend in terms of actual dollar increases. 2. Based on her knowledge of industry trends, she believes that the gross profit percentage for 20X4 should be about 2 percent less than the percentage for 20X3. 3. Based on her knowledge of regulations, she is aware that the effective tax rate for the company for 20X4 has been reduced by 5 percent from that in 20X3. 4. Based on her knowledge of economic conditions, she is aware that the effective interest rate on the company's line of credit for 20X4 was approximately 12 percent. The…arrow_forwardAnswer this question general accountingarrow_forward
- Need correct answer general Accountingarrow_forwardAbc general accountingarrow_forwardA firm sells 2,800 units of an item each year. The carrying cost per unit is $3.26 and the fixed costs per order are $74. What is the economic order quantity? (Please round units to the nearest whole number)arrow_forward
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningSurvey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage LearningFinancial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
- Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:CengageManagerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning