Presented below are a number of operational guidelines and practices that have developed over time.

1. Fair value changes are not recognized in the accounting records.

2. Accounts receivable are recorded for sales on account rather than waiting until cash is

received.

3. Financial information is presented so that investors will not be misled.

4. Intangible assets are capitalized and amortized over periods benefited.

5. Each enterprise is kept as a unit distinct from its owner or owners.

6. All significant post-statement of financial position events are reported.

7. Revenue is recorded at point of sale.

8. All important aspects of bond indentures are presented in financial statements.

9. Rationale for accrual accounting.

10. Reporting must be done at defined time intervals.

11. An allowance for doubtful accounts is established.

12. All payments out of petty cash are charged to Miscellaneous Expense.

13. Goodwill is recorded only at time of purchase.

14. Cash received and paid is not the basis used to recognize revenues and expenses.

15. A company charges its sales commission costs to expense.

Required:

Select the assumption, principle, or constraint that most appropriately justifies these procedures and practices. (Do not use qualitative characteristics.)