Identify the accounting principle or assumption that best reflects each situation. Situation 1. Accounting information is based on actual cost. 2. Transactions and events are shown in monetary units. 3. The life of a company can be divided into time periods, and useful reports can be prepared for th periods. 4. Each business is accounted for separately from its owner or owners. 5. A company records the expenses incurred to generate the revenues reported. 6. A company reports details behind financial statements that would impact users' decisions.

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter2: Introduction To Financial Statements
Section: Chapter Questions
Problem 14MC: The three heading lines of financial statements typically include which of the following? A....
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Principle or Assumption
M]
r those
Time period assumption
Business entity assumption
Expense recognition (matching) principle
Going-concern assumption
Measurement (cost) principle
Transcribed Image Text:Principle or Assumption M] r those Time period assumption Business entity assumption Expense recognition (matching) principle Going-concern assumption Measurement (cost) principle
Identify the accounting principle or assumption that best reflects each situation.
Situation
1. Accounting information is based on actual cost.
2. Transactions and events are shown in monetary units.
3. The life of a company can be divided into time periods, and useful reports can be prepared for th
periods.
4. Each business is accounted for separately from its owner or owners.
5. A company records the expenses incurred to generate the revenues reported.
6. A company reports details behind financial statements that would impact users' decisions.
Transcribed Image Text:Identify the accounting principle or assumption that best reflects each situation. Situation 1. Accounting information is based on actual cost. 2. Transactions and events are shown in monetary units. 3. The life of a company can be divided into time periods, and useful reports can be prepared for th periods. 4. Each business is accounted for separately from its owner or owners. 5. A company records the expenses incurred to generate the revenues reported. 6. A company reports details behind financial statements that would impact users' decisions.
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