Question

Identify the accounting assumption, principle, or constraint that describes each situation below. Do not use any asumption, principle or constraint more than once.

(a) Is the rationale for why plant assets are not reported at liquidation value. Monetary unit assumption/ Revenue recognition principle/ Cost constraint/ Historical cost principle/ Materiality/ Economic entity assumption/ Expense recognition principle/ Periodicity assumption/ Full disclosure principle/ Going concern assumption
(b) Indicates that personal and business record-keeping should be separately maintained. Materiality/ Cost constraint/ Periodicity assumption/ Expense recognition principle/ Monetary unit assumption/ Revenue recognition principle/ Historical cost principle/ Going concern assumption/ Full disclosure principle/ Economic entity assumption
(c) Ensures that all relevant financial information is reported. Economic entity assumption/ Historical cost principle/ Monetary unit assumption/ Materiality/ Full disclosure principle/ Going concern assumption/ Periodicity assumption/ Revenue recognition principle/ Expense recognition principle/ Cost constraint
(d) Assumes that the dollar is the "measuring stick" used to report on financial performance. Periodicity assumption/ Full disclosure principle/ Expense recognition principle/ Materiality/ Historical cost principle/ Monetary unit assumption/ Cost constraint/ Going concern assumption/ Revenue recognition principle/ Economic entity assumption
(e) Requires that accounting standards be followed for all items of significant size. Revenue recognition principle/ Materiality/ Going concern assumption/ Full disclosure principle/ Cost constraint/ Historical cost principle/ Economic entity assumption/ Expense recognition principle/ Monetary unit assumption/ Periodicity assumption
(f) Separates financial information into time periods for reporting purposes. Economic entity assumption/ Historical cost principle/ Materiality/ Expense recognition principle/ Revenue recognition principle/ Going concern assumption/ Cost constraint/ Full disclosure principle/ Monetary unit assumption/ Periodicity assumption
(g) Requires recognition of expenses in the same period as related revenues. Periodicity assumption/ Monetary unit assumption/ Historical cost principle/ Revenue recognition principle/ Going concern assumption/ Materiality/ Cost constraint/ Economic entity assumption/ Expense recognition principle/ Full disclosure principle
(h) Indicates that fair value changes subsequent to purchase are not recorded in the accounts. Monetary unit assumption/ Historical cost principle/ Economic entity assumption/ Expense recognition principle/ Periodicity assumption/ Cost constraint/ Materiality/ Full disclosure principle/ Going concern assumption/ Revenue recognition principle.

Answer 1

a) Historical Cost principle

b) Economic entity assumption

c) Full disclosure principle

d) Monetary unit assumption

e) Materiality principle

f) Conservatism

g) Matching principle

h) Historical cost principle