Check your progress exercise 2 check your progress

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Check Your Progress Exercise – 2Check Your Progress Exercise – 21.1.What does the objectivity principle require for information presented in financialWhat does the objectivity principle require for information presented in financialstatement?statement?……………………………………………………………………………………………………………………………………………………………………………………………………2.A business shows office stationery on the balance sheet at its cost Birr 430 cost, although it2.A business shows office stationery on the balance sheet at its cost Birr 430 cost, although itcannot be sold for more than Birr 10 as scrap paper.Which accounts principle require thiscannot be sold for more than Birr 10 as scrap paper.Which accounts principle require thistreatment?treatment?……………………………………………………………………………………………………………………………………………………………………………………………………5.Stable Monetary Unit Concept /Unit of measurement5.Stable Monetary Unit Concept /Unit of measurementAccounting transactions are measured, recorded and reported in terms of monetary unit.InAccounting transactions are measured, recorded and reported in terms of monetary unit.Inthe process of measuring, recording and reporting the monetary unit is treated as a stable unitthe process of measuring, recording and reporting the monetary unit is treated as a stable unitof measure like a gallon, a kilometer etc.However, the monetary unit is not a stable unit ofof measure like a gallon, a kilometer etc.However, the monetary unit is not a stable unit ofmeasure nevertheless; accountants use a monetary unit as a standard unit of measurement inmeasure nevertheless; accountants use a monetary unit as a standard unit of measurement intheir reports.Money is both the common factor of all business transactions and the onlytheir reports.Money is both the common factor of all business transactions and the onlyfeasible unit of measurement that can be used to achieve uniform financial data.feasible unit of measurement that can be used to achieve uniform financial data.The generally accepted use of the monetary unit for accounting for and reporting the activitiesThe generally accepted use of the monetary unit for accounting for and reporting the activitiesof an enterprise has got two major limitations: First, it limits the scope of accounting reports.of an enterprise has got two major limitations: First, it limits the scope of accounting reports.The scope of the report will be on information which can be quantifiable and measurableThe scope of the report will be on information which can be quantifiable and measurableinterims of monetary unit.What so ever the information is useful to the user, unless it isinterims of monetary unit.What so ever the information is useful to the user, unless it ismeasurable interims of monetary unit, it cannot be reported on the financial statements.

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Term
Fall
Professor
cherinet
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