ssignment ble eTextbook Do It! Review 2-3 CALCULATOR PRINTER VERSION ·BACK Match

Question

ssignment ble eTextbook Do It! Review 2-3 CALCULATOR PRINTER VERSION ·BACK Match each item (characteristics, assumptions, principles, and constraint guide the FASB when it creates accounting standards) with a description below. Items not easily quantified in dollar terms are not reported in the financial statements. Accounting information must be complete, neutral, and free from error Personal transactions are not mixed with the company's transactions. The cost to provide information should be weighed against the benefit that users will gain from having the intormation aveilebdie 2. 3. 4. 5. 6. 7. 8. 9 10. :A company's use of the same accounting principles from year to year Assets are recorded and reported at original purchase price. Accounting information should help users predict future events, and should confirm or correct prior expectations The life of a business can be divided into artificial segments of time. : The reporting of all information that would make a difference to financal statement users. The judgment concerning whether an item's size makes it likely to influence a decision-maker Assumes a business will remain in operation for the foreseeable future. Different companies use the same accounting principles 12 LINK TO TEXT Question Attempts: Unlimited SAVE FOR LATER SUBMIT A Ve Privacy Policy2000-2018 John Wiley & Sons, Inc, All Rights Reserved. A Division of 2ohn Wiley& Sons. Ins

Explanation / Answer

Monetary unit assumption Items not easily quantified in dollar terms are not reported in the financial statements. Faithful representation Accounting information must be complete, neutral, and free from error. Economic entity assumption Personal transactions are not mixed with the company’s transactions. Cost constraint The cost to provide information should be weighed against the benefit that users will gain from having the information available. Consistency A company’s use of the same accounting principles from year to year. Historical cost principle Assets are recorded and reported at original purchase price. Relevance Accounting information should help users predict future events, and should confirm or correct prior expectations. Periodicity assumption The life of a business can be divided into artificial segments of time. Full disclosure principle The reporting of all information that would make a difference to financial statement users. Materiality The judgment concerning whether an item’s size makes it likely to influence a decision-maker. Going concern assumption Assumes a business will remain in operation for the foreseeable future. Comparability Different companies use the same accounting principles.

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