Acc280 Financial Accounting: P7-3A Presented below are the assumptions, principles, and constraints

Acc280 Financial Accounting

P7-3A
Presented below are the assumptions, principles, and constraints used in this chapter.
1. Economic entity assumption
2. Going concern assumption
3. Monetary unit assumption
4. Time period assumption
5. Full disclosure principle
6. Revenue recognition principle
7. Matching principle
8. Cost principle
9. Materiality
10. Conservatism

Identify the accounting assumption, principle, or constraint that describes each situation below. Do not use more than once.
(a) Assets are not stated at their liquidation value. (Do not use cost principle.)
(b) The death of the president is not recorded in the accounts.
(c) Pencil sharpeners are expensed when purchased.
(d) Depreciation is recorded in the accounts over the life of an asset. (Do not use the going concern assumption.)
(e) Each entity is kept as a unit distinct from its owner or owners.
(f) Reporting must be done at defined intervals.
(g) Revenue is recorded at the point of sale.
(h) When in doubt, it is better to understate rather than overstate net income.
(i) All important information related to inventories is presented in the footnotes or in the financial statements.
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