Question

For each of the following circumstances, give the letter Item(s) Indicating the accounting principle involved. Some letters may be used more than once, and some may not be used at all. A. Continuity I. Matching B. Neutrality 3. Proprietary c. Comparability K. Faithful representation D. Cost/benefit effectiveness L. Revenue recognition E. Full disclosure M. Separate entity F. Historical cost N. Time period G. Relevance 0. Unit of measure H. Nominal dollar financial capital maintenance 1. Financial statements are prepared from the point of view of the owners. A note describing the company's possible liability in a lawsuit is included with the financial 2. EG statements, even though no formal liability exists at the balance sheet date 3. Marketable securities are valued at current (market) value. O, HI The personal assets of partners are excluded from the partnership balance sheet even 4 KB though they are pledged as security for partnership loans A retail store uses estimates rather than a complete physical count of its inventory for 5. O, HI purposes of preparing monthly financial statements Allwilli married in the arrinte only when it arise from the ruhen another nntily K

Answer 1

1) J

2)   E , G

3) O , H , I

4) K , B

5) O , H, I

6) F , K

7) H

8) I , L

9) F , A , I

10) A