Which one of the following statements is true?

Question

Quizplus · Accepted Answer

Measurement is concerned with how economic effects should be quantified, such as through historical cost or fair value, while recognition refers to when economic effects should be recognized in the financial statements. Option A is incorrect as recognition is concerned with when to report economic effects, not the dollar amount. Option C is incorrect as the stability principle refers to the continuity of the reporting entity, not the identification of it. Option D is incorrect as the monetary unit assumption assumes that economic effects are valued in a common unit of currency, not in terms of current purchasing power.

Which One of the Following Statements Is True