The following basic accounting principles and assumptions were discussed in the chapter:
• Economic entity
• Going concern
• Monetary unit
• Cost principle
• Time period
_________ 1. Lester Company has a division in Germany. Before preparing the financial statements for the company and the foreign division, Lester translates the financial statements of its Germany division from the euro to U.S. dollars.
_________ 2. Matt enters into a partnership to start a bike shop with a friend. Each partner makes an initial cash investment of $8,000. Matt opens a checking account in the name of the company and transfers $8,000 from his personal account into the new account.
_________ 3. Dreamland Inc. has always prepared financial statements with a yearend of May 31. However, the company is going to sell stock to the public for the first time and is required by the SEC to give quarterly financial reports.
_________ 4. Platt Corp. purchases a fifty acre plot of land to build the world's largest factory. The company recorded the property at the amount of cash given to acquire it.
_________ 5. Lockbox Corp. is in its ninetieth year of business. The owner of the company is going to retire in two months and turn the company over to his son.
Required
Fill in the blank with the appropriate principle or assumption.