States that the company will continue in operation

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states that the company will continue in operation long enough to carryout its existing objectives and commitments.Thehistorical cost principlestates that companies should record assets at their cost. Thefairvalueprinciple indicates that assets and liabilities should be reported at fair value. Therevenuerecognition principlerequires that companies recognize revenue in the accounting period inwhich the performance obligation is satisfied. Theexpense recognition principledictates thatefforts (expenses) be matched with results (revenues)The full disclosure principlerequiresthat companies disclose circumstances and events that matter to financial statement users.
Test Bank for Accounting Principles, Thirteenth EditionThe cost constraint weighs the cost that companies incur to provide a type of information againstits benefits to financial statement users.TRUE-FALSE STATEMENTS1.Many business transactions affect more than one time period.
2.The time period assumption states that the economic life of a business entity can bedivided into artificial time periods.
3.The time period assumption is often referred to as the expense recognition principle.
4.A company’s calendar year and fiscal year are always the same.
5.Accounting time periods that are one year in length are referred to as interim periods.
6.Income will always be greater under the cash basis of accounting than under the accrualbasis of accounting.
7.The cash basis of accounting isnotin accordance with generally accepted accountingprinciples.
8.The expense recognition principle requires that efforts be recognized at the same time asthe related accomplishments.
9.Expense recognition is related to revenue recognition.

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Term
Fall
Professor
NoProfessor
Tags
Accounting, Balance Sheet, Depreciation, The Lottery, Generally Accepted Accounting Principles, AACSB

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