Question

Identify the accounting assumption or principle that is described below.

(a)		select the accounting assumption or principle Going Concern AssumptionMonetary Unit AssumptionPeriodicity AssumptionHistorical Cost PrincipleEconomic Entity AssumptionFull Disclosure Principle		Is the rationale for why plant assets are not reported at liquidation value. (Note: Do not use the historical cost principle.)
(b)		select the accounting assumption or principle Historical Cost PrincipleGoing Concern AssumptionEconomic Entity AssumptionFull Disclosure PrincipleMonetary Unit AssumptionPeriodicity Assumption		Indicates that personal and business record-keeping should be separately maintained.
(c)		select the accounting assumption or principle Periodicity AssumptionGoing Concern AssumptionFull Disclosure PrincipleHistorical Cost PrincipleEconomic Entity AssumptionMonetary Unit Assumption		Assumes that the dollar is the “measuring stick” used to report on financial performance.
(d)		select the accounting assumption or principle Periodicity AssumptionFull Disclosure PrincipleEconomic Entity AssumptionGoing Concern AssumptionHistorical Cost PrincipleMonetary Unit Assumption		Separates financial information into time periods for reporting purposes.
(e)		select the accounting assumption or principle Full Disclosure PrincipleMonetary Unit AssumptionEconomic Entity AssumptionPeriodicity AssumptionHistorical Cost PrincipleGoing Concern Assumption		Measurement basis used when a reliable estimate of fair value is not available.
(f)		select the accounting assumption or principle Full Disclosure PrincipleHistorical Cost PrincipleEconomic Entity AssumptionGoing Concern AssumptionMonetary Unit AssumptionPeriodicity Assumption		Dictates that companies should disclose all circumstances and events that make a difference to financial statement users.

Answer 1

a	Going Concern Assumption	Is the rationale for why plant assets are not reported at liquidation value. (Note: Do not use the historical cost principle.)
b	Economic Entity Assumption	Indicates that personal and business record-keeping should be separately maintained.
c	Monetary Unit Assumption	Assumes that the dollar is the “measuring stick” used to report on financial performance.
d	Periodicity Assumption	Separates financial information into time periods for reporting purposes.
e	Historical Cost Principle	Measurement basis used when a reliable estimate of fair value is not available.
f	Full Disclosure Principle	Dictates that companies should disclose all circumstances and events that make a difference to financial statement users.