Question

1 Since cost is a reliable measure, the cost principle holds that the accounting records should continue reporting an asset at its historical cost over its useful life. True or False

2 Outside investors ordinarily use financial accounting information to decide whether or not to invest in a business. True or False

3 Under the going concern principle, accountants assume that the business will remain in operations long enough to use existing resources for their intended purpose. True or False

0. As per the ________, the entity will remain in operation for the foreseeable future. A) economic entity concept B) monetary unit assumption C) going concern assumption D) cost principle

Answer 1

1. The answer is true because the cost principle states that company should record the assets in historical cost but as for depreciation it is treated as an expense and cost will remain same in Balance Sheet.

2.The answer is true because the investors will see the financial statements and ratios before making an investment.

3. The answer is true because going concern principle states that the company will run in long term untill it is caught in frauduent practices or bankruptcy.

0. The answer is Going Concern Assumpution because, as per this assumption it is believed that the company has perpectual succession.The economic entity says that the company has its own legal entity and company and owners are different. Monetary Unit assumption says that money is served as unit of measurement and only those items should be recorded which can be measurable in terms of money with the help of currency. Cost Principle says that the assets brought should be recorded in its historical cost over its useful life