Financial statements are prepared according to a number of accounting

principles, some of which are listed below:

1. Business entity 6. Consistency

2. Going concern 7. Full disclosure

3. Stable monetary unit 8.Matching

4. Historical cost 9.Materiality

5. Revenue recognition

Required: Identify the principle that would apply in each of the

following situations. Explain your choice.

___________c. A machine is recorded at its purchase price of $9,000 and is not

revalued at the end of the accounting period to reflect its market

value of $10,000.

___________d. Land purchased in 1985 for $10,000 is not revalued even though it

would take $30,000 in equivalent money to purchase the land

today.