E$2.7$B $($L$03,4)($Assumptions$,$ Principles and Constraint$)$ Presented below are number of operational guidelines and practices that have developed over time.

Instructions

Select the assumption, principles, or constraint that most appropriately justifies these procedures and practices.

a$)$ All significant post$-$ balance sheet events are reported.

b$)$ Intangibles are capitalized and amortized over periods benefited.

c$)$ Price level changes are not recognized in the accounting records.

d$)$ Brokerage firms use market value for the purpose of valuation of all marketable securities$.$

e$)$ Financial information is presented so that reasonably prudent investors will not be misted.

f$)$ Lower cost or net realizable value is used to value inventories.

g$)$ Each enterprise is kept as a unit distinct from its owner or owners.

h$)$ All import aspects of bond indentures are presented in financial statements.

i$)$ Revenue is recorded when the performance obligation satisfied.

j$)$ A company charges its sales commission costs to expenses.

k$)$ An allowance doubtful accounts is established.

l$)$ Reporting must be done at defined time intervals.

m$)$ Goodwill is recorded only at time of purchase.

n$)$ The use of consolidated statements is justified.

o$)$ Rationale for accrual accounting is stated.