Homework Answers
1) Solution: Comparability
Explanation: Comparability; the information must be possible to compare an entity over time and with same information about other entities
2) Solution: Expense recognition principle
Explanation: Expense Recognition Principle states that expenses must be recognized in the same period as the revenues to which they incur
3) Solution: going concern assumption
Explanation: Deferrals would be justified based on going concern
4) Solution: Full disclosure principle
Explanation: The full disclosure principle states that a company is required to provide the required necessary information so that people who are accustomed to reading financial information can make informed decisions concerning the business
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Match the appropriate accounting assumption, principle, characteristic or constraint that is most applicable to each of...
State the accounting assumption, principle, or constraint that is most applicable in the following cases. 1....
State the accounting assumption, principle, or constraint that is most applicable in the following cases. 1. Financial statements are prepared each year. 2. The company employs the same inventory valuation method from period to period. 3. All significant post-balance sheet events are reported. 4. A patent is capitalized and amortized over the periods benefited. 5. Assuming that dollars today will buy as much as ten years ago. 6. Rent paid in advance is recorded as prepaid rent. 7. All payments...
P3. State the accounting assumption, principle, or constraint that is most applicable in the following cases....
P3. State the accounting assumption, principle, or constraint that is most applicable in the following cases. 1. All payments less than $25 are expensed as incurred. 2. The company employs the same inventory valuation method from period to period. 3. A patent is amortized as an expense over the periods benefited. 4. Assuming that dollars today will buy as much as ten years ago. 5. Financial statements are prepared each year. 6. All significant post-balance sheet events are reported. 7....
. Match accounting assumption with most appropriate statement. A. Time Period F. Expense Recognition B. Materiality...
. Match accounting assumption with most appropriate statement. A. Time Period F. Expense Recognition B. Materiality G. Consistency C. Going Concern H. Full Disclosure D. E. Revenue Recognition Business Entity I. Transaction Approach J. Historical Cost Insert the applicable letter below i. Land is purchased for $760,000. The current value of the land is $625,000. Which concept is applied to record the correct amount? ii. Wall Street Journal: subscription fees collected in advance are recorded as unearned subscription income...
Instructions Identify by number the accounting assumption, principle, or constraint that describes each situation below. Do...
Instructions Identify by number the accounting assumption, principle, or constraint that describes each situation below. Do not use a number more than once. a. Allocates expenses to revenues in the proper period. b. Indicates that fair value changes subsequent to purchase are not recorded in the accounts. (Do not use revenue recognition principle.) c. Ensures that all relevant financial information is reported. d. Rationale why plant assets are not reported at liquidation value. (Do not use historical cost principle.) e....
Identify the basic assumption, accounting principle, or constraint that applies to each statement. See bottom for...
Identify the basic assumption, accounting principle, or constraint that applies to each statement. See bottom for list of choices. Also Circle “OK” or “NOT OK”. Choose Not OK if the explanation violates the assumption, principle or constraint. (10 points): 1. Wagner Corporation adjusted the value of all assets and liabilities to reflect changes in the purchasing power of the dollar, Wagner uses the current rate of inflation as a guide. OK NOT OK Assumption/Principle: ______________________ 2. Maui Jims, Inc., provides...
Review the transactional information and identify the accounting assumption, principle, and or constraint to which it...
Review the transactional information and identify the accounting assumption, principle, and or constraint to which it is related. Select an option below to match with each question: A) Time Period or Periodicity Assumption B) Economic Entity Assumption C) Fair Value D) Revenue and Expense Recognition Principle E) Revenue Recognition Principle F) Cost principle G) Full Disclosure Principle H) Separate or Economic entity Principle I) Expense Recognition Principle 1) The amount of goodwill recorded by a company that purchases another company...
Match the accounting principle on the left with the appropriate statement on the right. Entity assumption...
Match the accounting principle on the left with the appropriate statement on the right. Entity assumption a. All relevant information must be presented in the financial statements. Materiality b. X Corp. uses FIFO every year to value its inventory. Full disclosure c. Carefully make estimates to avoid overstating assets or net income. Consistency d. Sales are recorded when the product is provided, not when we get paid. Historical cost e. The business plans to continue indefinitely. Conservatism f. John's personal...
Match each of the numbered descriptions with the principle or assumption it best reflects. Principle/Assumption Description...
Match each of the numbered descriptions with the principle or assumption it best reflects. Principle/Assumption Description 1. A company reports details behind financial statements that would impact users' decisions 2. Financial statements reflect the assumption that the business continues operating 3. A company records the expenses incurred to generate the revenues reported 4. Concepts, assumptions, and guidelines for preparing financial statements. 5. Each business is accounted for separately from its owner or owners. 6. Revenue is recorded when products and...
4. Match accounting assumption with most appropriate statement. A. Time Period F. Expense Recognition B. Materiality...
4. Match accounting assumption with most appropriate statement. A. Time Period F. Expense Recognition B. Materiality G. Consistency C. Going Concern H. Full Disclosure D. Revenue Recognition 1. Transaction Approach E. Business Entity J. Historical Cost Insert the applicable letter below Land is purchased for $760,000. The current value of the land is $625,000. Which concept is applied to record the correct amount? ii. Wall Street Journal: subscription fees collected in advance are recorded as unearned subscription income and later...
Select the name of the accounting assumption, principle or qualitative characteristic that you believe should be...
Select the name of the accounting assumption, principle or qualitative characteristic that you believe should be written in place of the dotted blank space. "The ............ assumption implies that the numbers contained in financial statements are not periodically adjusted for inflation, regardless of whether the economic entity is expected to remain in business for a long time." Periodicity Going concern Monetary unit Comparability Economic entity None of the answer choices is correct
State the accounting assumption, principle, or constraint that is most applicable in the following cases. 1. Financial statements are prepared each year. 2. The company employs the same inventory valuation method from period to period. 3. All significant post-balance sheet events are reported. 4. A patent is capitalized and amortized over the periods benefited. 5. Assuming that dollars today will buy as much as ten years ago. 6. Rent paid in advance is recorded as prepaid rent. 7. All payments...
P3. State the accounting assumption, principle, or constraint that is most applicable in the following cases. 1. All payments less than $25 are expensed as incurred. 2. The company employs the same inventory valuation method from period to period. 3. A patent is amortized as an expense over the periods benefited. 4. Assuming that dollars today will buy as much as ten years ago. 5. Financial statements are prepared each year. 6. All significant post-balance sheet events are reported. 7....
Instructions Identify by number the accounting assumption, principle, or constraint that describes each situation below. Do not use a number more than once. a. Allocates expenses to revenues in the proper period. b. Indicates that fair value changes subsequent to purchase are not recorded in the accounts. (Do not use revenue recognition principle.) c. Ensures that all relevant financial information is reported. d. Rationale why plant assets are not reported at liquidation value. (Do not use historical cost principle.) e....
Match the accounting principle on the left with the appropriate statement on the right. Entity assumption a. All relevant information must be presented in the financial statements. Materiality b. X Corp. uses FIFO every year to value its inventory. Full disclosure c. Carefully make estimates to avoid overstating assets or net income. Consistency d. Sales are recorded when the product is provided, not when we get paid. Historical cost e. The business plans to continue indefinitely. Conservatism f. John's personal...
Match each of the numbered descriptions with the principle or assumption it best reflects. Principle/Assumption Description 1. A company reports details behind financial statements that would impact users' decisions 2. Financial statements reflect the assumption that the business continues operating 3. A company records the expenses incurred to generate the revenues reported 4. Concepts, assumptions, and guidelines for preparing financial statements. 5. Each business is accounted for separately from its owner or owners. 6. Revenue is recorded when products and...
4. Match accounting assumption with most appropriate statement. A. Time Period F. Expense Recognition B. Materiality G. Consistency C. Going Concern H. Full Disclosure D. Revenue Recognition 1. Transaction Approach E. Business Entity J. Historical Cost Insert the applicable letter below Land is purchased for $760,000. The current value of the land is $625,000. Which concept is applied to record the correct amount? ii. Wall Street Journal: subscription fees collected in advance are recorded as unearned subscription income and later...
Select the name of the accounting assumption, principle or qualitative characteristic that you believe should be written in place of the dotted blank space. "The ............ assumption implies that the numbers contained in financial statements are not periodically adjusted for inflation, regardless of whether the economic entity is expected to remain in business for a long time." Periodicity Going concern Monetary unit Comparability Economic entity None of the answer choices is correct
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