Property, plant, and equipment Relevance Current ratio Solvency Materiality Economic entity assumption [ Choose ] An accounting principle that states that companies should record assets at their cost. An assumption that every economic entity can be separately identified and accounted for. A measure of computed as current assets divided by current liabilities. The ability of a company to pay obligations that are expected to become due within the next year or operating cycle. Assets with relatively long useful lives that are currently used in operating the business. The quality of information that indicates the information makes a difference in a decision. The ability of a company to pay interest as it comes due and to repay the balance of debt due at maturity. Whether omitting or misstating an item could influence the decision of a financial statement user. Use of the same accounting principles and methods from year to year within a company. Obligations that a company expects to pay within the next year or operating cycle, whichever is longer. Screen Shot 2022-11...09.19 Current liabilities Screen Shot 2022-11...08.19 Consistency Liquidity Screen Shot 2023-01...7.32 A Historical cost principle