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Presented below is a luting of some of the more common assumptions, print and constraints: Economic entity assumption Going concern assumption Monetary unit assumption Periodicity
Presented below is a luting of some of the more common assumptions, print and constraints: Economic entity assumption Going concern assumption Monetary unit assumption Periodicity assumption Historical cost principle Matching principle Full disclosure principle Cost-benefit relationship Materiality Industry practice Conservatism REQUIRED: Identify by number the accounting assumption, principle, or constraint that describes each situation below. Do not use a letter more than once. (a) Permits the use of market value valuation in certain specific situations. (b) Rationale why plant assets are not reported at liquidation value. (Do not use historical cost principle.) (c) Allocates expenses to revenues in the proper period. (d) Indicates that personal and business record keeping should be separately maintained. (e) Ensures that all relevant financial information is reported. (f) Indicates that market value changes subsequent to purchase are not recorded in the accounts. (Do not use revenue recognition principle.) (g) Anticipates all losses, but reports no gains. (h) Separates financial information into time periods for reporting purposes. (i) Assumes that the dollar is the "measuring stick" used to report on financial performance. (j) Requires that information significant enough to a fleet the decision of reasonably informed users should be disclosed. (Do not use full disclosure principle.)
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