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Unformatted text preview: d) Rationale why plant assets are not reported at liquidation value. (Do not use historical cost principle) 2. GOING CONCERN ASSUMPTION e) Anticipates all losses, but reports no gains. 11. CONSERVATION f) Indicates that personal and business record keeping should be separately maintained. 1. ECONOMIC ENTITY ASSUMPTION g) Separates financial information into time periods for reporting purposes. 4. PERIODICITY ASSUMPTION h) Permits the use of market value valuation in certain specific situations. 10. INDUSTRY PRACTICES i) Requires that information significant enough to affect the decision of reasonably informed users should be disclosed. (Do not use full disclosure principle.) 9. MATERIALITY Jesica Islas Intermediate Accounting 1 January 22, 2007 Professor A. Wu Chapter 2 j) Assumes that the dollar is the measuring stick used to report on financial performance. 3. MONETARY UNIT ASSUMPTION...
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- Spring '10