Question
The following basic accounting principles and assumptions were discussed in the chapter: Economic entity Monetary unit Cost principle Going concern Time period Fill in each
The following basic accounting principles and assumptions were discussed in the chapter:
Economic entity
Monetary unit
Cost principle
Going concern
Time period
Fill in each of the blanks with the accounting principle or assumption that is relevant to the
situation described.
________________________________ 1. Genesis Corporation is now in its 30th year of
business. The founder of the company is planning to
retire at the end of the year and turn the business
over to his daughter.
________________________________ 2. Nordic Company purchased a 20-acre parcel of
property on which to build a new factory. The
company recorded the property on the records at
the amount of cash given to acquire it.
________________________________ 3. Jim Bailey enters into an agreement to operate a
new law firm in partnership with a friend. Each
partner will make an initial cash investment of
$10,000. Jim opens a checking account in the name
of the partnership and transfers $10,000 from his
personal account into the new account.
________________________________ 4. Multinational Corp. has a division in Japan. Prior to
preparing the financial statements for the company
and all of its foreign divisions, Multinational
translates the financial statements of its Japanese
division from yen to U.S. dollars.
________________________________ 5. Camden Company has always prepared financial
statements annually, with a year-end of June 30.
Because the company is going to sell its stock to the
public for the first time, quarterly financial reports
will also be required by the SEC.
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