Assumptions and Principles Presented below are the four assumptions and three principles used in measuring and reporting accounting information.

\section*{Required:}
Identify the assumption or principle that best describes each situation below.
1. Requires that an activity be recorded at the exchange price at the time the activity occurred 2. Allows a company to report financial activities separate from the activities of the owners 3. Implies that items such as customer satisfaction cannot be reported in the financial statements 4. Specifies that revenue should only be recognized when earned and collection reasonably assured 5. Justifies why some assets and liabilities are not reported at their value if sold 6. Allows the life of a company to be divided into artificial time periods so that accounting reports can be provided on a timely basis 7. Requires materially relevant information to be disclosed Exercise

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Principles e. Historical cost Revenue recognition Full disclosure Assumptions a. b. Separate entity Continuity (going-concern) f. C. Periodicity g. d. Unit-of-measure