ChrisBurchfield Unit 1 Assignment

ChrisBurchfield Unit 1 Assignment - Exercise 2-7 1 Economic...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Exercise 2-7 1. Economic entity assumption (45) - (f) indicates that personal and business record keeping should be separately maintained. 2. Going-concern assumption (46) - (d) Rationale why plant assets are not reported at liquidation value. (Do not use historical cost principle.) 3. Monetary unit assumption (46) - (j) assumes that the dollar is the “measuring stick” used to report on financial performance. 4. Periodicity assumption (46) - (g) separates financial information into time periods for reporting purposes. 5. Historical-cost principle (47) - (b) Indicates that market value changes subsequent to purchase are not recorded in the accounts. (Do not use revenue recognition principle.) 6. Matching principle (49) - (a) Recognizes expenses based on contribution to revenues in the proper period. 7. Full disclosure principle (51) - (c) Ensures that all relevant financial information is reported. 8. Cost-benefit relationship (53) - not defined in any assumptions, principles or constraints in (a) - (j). 9. Materiality (54) - (i) requires that information significant enough to affect the decision of reasonably informed users should be disclosed. (Do not use full disclosure principle.) 10. Industry practices (55) - (h) Permits the use of market value valuation in certain specific situations.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern