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Match the Proper Assumption to Descriptions Listed Below

Question 104

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Match the proper assumption to descriptions listed below

Premises:
Economic entity assumption
Stable dollar assumption
Going concern assumption
Fiscal period assumption
Responses:
The economic life of an entity can be divided into time periods.
The financial statements should contain transactions related to only the business and not the individual owners.
Purchasing power of money is constant over time.
The dollar value attached to an item on a company’s balance sheet is determined by the market in which the company operates.
Life of the entity is indefinite.

Correct Answer:

The economic life of an entity can be divided into time periods.
The financial statements should contain transactions related to only the business and not the individual owners.
Purchasing power of money is constant over time.
The dollar value attached to an item on a company’s balance sheet is determined by the market in which the company operates.
Life of the entity is indefinite.
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