Assumptions, principles, and constraints (20 points) 1.) Presented below is a list of assumptions, principles and constraints. Identify by letter the assumption principle or constraint that applies to each situation (2 points cach). Items CAN be usod more than once a.) Economic Entity Assumption b.) Materiality c.)Going Concern Assumption d.) Historical Cost Principle g.) Full Disclosure Principle 1) Revenue Recognition Principle k.) Industry Practices c.) Conservatism ) Monetary Unit Assumption b.) Materiality .) Cost-Benefit Relationship 1 .) Assumes that the company will continue operations for the indefinite future. 2) Records assets at the price we initially paid for them. 3.) Infornation that is worth less than it costs to prodace is not considered 4) Requires that information-big enough to make a difference-be reported (do not use full disclosure). 5.) Requires US firms to "keep score in dollars." 6.) We try to present all information that could be useful to a reasonably informed investor 7.) Allocates revenue in the period in which it was earne 8) Requires us (generally) to initially record asscts at the price we paid for them. 2.) GAAP is moving away from historical cost and towards fair market value. Name one advantage and one disadvantage of such a move (4 points)