Accounting assumptions : These are the conventions which guide FASB (Financial Accounting Standards Board) to develop accounting standards. The basic assumptions are monetary unit assumption, economic entity assumption, periodicity assumption, and going concern assumption. Accounting principles : These are the rules which guide FASB to prepare guidelines necessary for reporting the accounting formation, in a useful and relevant format which is better understood by the users. Some basic principles are historical cost principle, fair value principle, and full disclosure principle. To identify : The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

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Answer 1

Question

Chapter 2, Problem 2.13E

(a)

To determine

Accounting assumptions: These are the conventions which guide FASB (Financial Accounting Standards Board) to develop accounting standards. The basic assumptions are monetary unit assumption, economic entity assumption, periodicity assumption, and going concern assumption.

Accounting principles: These are the rules which guide FASB to prepare guidelines necessary for reporting the accounting formation, in a useful and relevant format which is better understood by the users. Some basic principles are historical cost principle, fair value principle, and full disclosure principle.

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

(b)

To determine

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

(c)

To determine

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

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Students have asked these similar questions

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The inventory data for an item for November are: Nov. 1 Inventory 4 Sold 19 units at $23 8 units 10 Purchased 32 units at $21 25 units 17 Sold 30 Purchased 21 units at $23 Using a perpetual system, what is the cost of goods sold for November if the company uses LIFO? a. $731 b. $861 c. $962 Od. $709

I got the 3rd incorrect. can you help me go step by step. Date Line Item Description Units and Cost Amount Mar. 1 Inventory 21 units @ $31 $651 June 16 Purchase 29 units @ $33 957 Nov. 28 Purchase 39 units @ $39 1,521 Total 89 units $3,129 There are 13 units of the product in the physical inventory at November 30. The periodic inventory system is used. Determine the inventory cost using the weighted average cost methods. $

Answer 2

Question

Chapter 2, Problem 2.13E

(a)

To determine

Accounting assumptions: These are the conventions which guide FASB (Financial Accounting Standards Board) to develop accounting standards. The basic assumptions are monetary unit assumption, economic entity assumption, periodicity assumption, and going concern assumption.

Accounting principles: These are the rules which guide FASB to prepare guidelines necessary for reporting the accounting formation, in a useful and relevant format which is better understood by the users. Some basic principles are historical cost principle, fair value principle, and full disclosure principle.

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

(b)

To determine

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

(c)

To determine

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

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Answer 3

Question

Chapter 2, Problem 2.13E

(a)

To determine

Accounting assumptions: These are the conventions which guide FASB (Financial Accounting Standards Board) to develop accounting standards. The basic assumptions are monetary unit assumption, economic entity assumption, periodicity assumption, and going concern assumption.

Accounting principles: These are the rules which guide FASB to prepare guidelines necessary for reporting the accounting formation, in a useful and relevant format which is better understood by the users. Some basic principles are historical cost principle, fair value principle, and full disclosure principle.

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

(b)

To determine

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

(c)

To determine

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

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Answer 4

Question

Chapter 2, Problem 2.13E

(a)

To determine

Accounting assumptions: These are the conventions which guide FASB (Financial Accounting Standards Board) to develop accounting standards. The basic assumptions are monetary unit assumption, economic entity assumption, periodicity assumption, and going concern assumption.

Accounting principles: These are the rules which guide FASB to prepare guidelines necessary for reporting the accounting formation, in a useful and relevant format which is better understood by the users. Some basic principles are historical cost principle, fair value principle, and full disclosure principle.

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

(b)

To determine

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

(c)

To determine

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

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Answer 5

Chapter 2, Problem 2.13E

(a)

To determine

Accounting assumptions: These are the conventions which guide FASB (Financial Accounting Standards Board) to develop accounting standards. The basic assumptions are monetary unit assumption, economic entity assumption, periodicity assumption, and going concern assumption.

Accounting principles: These are the rules which guide FASB to prepare guidelines necessary for reporting the accounting formation, in a useful and relevant format which is better understood by the users. Some basic principles are historical cost principle, fair value principle, and full disclosure principle.

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

(b)

To determine

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

(c)

To determine

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

Answer 6

Chapter 2, Problem 2.13E

(a)

To determine

Accounting assumptions: These are the conventions which guide FASB (Financial Accounting Standards Board) to develop accounting standards. The basic assumptions are monetary unit assumption, economic entity assumption, periodicity assumption, and going concern assumption.

Accounting principles: These are the rules which guide FASB to prepare guidelines necessary for reporting the accounting formation, in a useful and relevant format which is better understood by the users. Some basic principles are historical cost principle, fair value principle, and full disclosure principle.

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

Answer 7

Chapter 2, Problem 2.13E

(a)

To determine

Accounting assumptions: These are the conventions which guide FASB (Financial Accounting Standards Board) to develop accounting standards. The basic assumptions are monetary unit assumption, economic entity assumption, periodicity assumption, and going concern assumption.

Accounting principles: These are the rules which guide FASB to prepare guidelines necessary for reporting the accounting formation, in a useful and relevant format which is better understood by the users. Some basic principles are historical cost principle, fair value principle, and full disclosure principle.

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

Answer 8

(b)

To determine

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

Answer 9

(b)

To determine

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

Answer 10

(c)

To determine

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

Answer 11

(c)

To determine

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

Answer 12

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Answer 13

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Answer 15

Ch. 2 - What is meant by the term operating cycle?Ch. 2 - Define current assets. What basis is used for...Ch. 2 - Prob. 3Q Ch. 2 - Prob. 4Q Ch. 2 - Prob. 5Q Ch. 2 - Prob. 6Q Ch. 2 - Prob. 7Q Ch. 2 - Prob. 8Q Ch. 2 - What do these classes of ratios measure? (a)...Ch. 2 - Prob. 10Q

Solution Summary: The author explains accounting assumptions and principles that guide FASB to develop accounting standards, such as monetary unit assumption, economic entity assumption and periodicity assumption.

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

To identify: The accounting assumptions and principles that were violated by Company L, and explain what the company actually should have done.

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Chapter 2 Solutions