Solved

Presented Below Are the Basic Assumptions and Principles Underlying Financial

Question 217

Matching

Presented below are the basic assumptions and principles underlying financial statements.
Identify the basic assumption or principle that is described below.

Premises:
The economic life of a business can be divided into artificial time periods.
The business will continue in operation long enough to carry out its existing objectives.
Assets should be recorded at their cost.
Economic events can be identified with a particular unit of accountability.
Circumstances and events that make a difference to financial statement users should be disclosed.
Only transaction data that can be expressed in terms of money should be included in the accounting records.
Responses:
Historical cost principle
Economic entity assumption
Full disclosure principle
Going concern assumption
Monetary unit assumption
Periodicity assumption

Correct Answer:

The economic life of a business can be divided into artificial time periods.
The business will continue in operation long enough to carry out its existing objectives.
Assets should be recorded at their cost.
Economic events can be identified with a particular unit of accountability.
Circumstances and events that make a difference to financial statement users should be disclosed.
Only transaction data that can be expressed in terms of money should be included in the accounting records.
Related Questions

Q215: Match the items below

Q216: Match the statements below with the appropriate

Q218: Match the descriptive statement below with the

Q219: For each of the following oversights, state

Q241: Depreciation expense for a period is an

Q242: An adjusting entry recording accrued salaries for

Q244: The expense recognition principle attempts to match

Q248: The _ principle gives accountants guidance as

Q254: Failure to adjust a prepaid expense account

Q260: In a service company revenue is recognized

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents