Question

Match each item characteristics, assumptions, principles, and constraint guide the FASB when it creates accounting standards with a description below.1. select an option Going Concern Assumption Periodicity Assumption Materiality Economic Entity Assumption Monetary Unit Assumption RelevanceCost Constraint Comparability Full Disclosure Principle Historical Cost Principle Consistency Faithful Representation Items not easily quantified in dollar terms are not reported in the financial statements.2. select an option Periodicity Assumption Historical Cost Principle Comparability Monetary Unit Assumption Economic Entity Assumption Consistency Relevance Full Disclosure Principle Faithful Representation Cost Constraint Materiality Going Concern Assumption Accounting information must be complete, neutral, and free from error.3. select an option Comparability Monetary Unit Assumption Materiality Economic Entity Assumption Full Disclosure Principle Relevance Periodicity Assumption Consistency Cost Constraint Faithful Representation Historical Cost PrincipleGoing Concern Assumption Personal transactions are not mixed with the company’s transactions.4. select an option Cost Constraint Going Concern Assumption Monetary Unit Assumption Consistency Economic Entity Assumption Relevance Faithful Representation Comparability Periodicity Assumption Historical Cost Principle Full Disclosure Principle Materiality The cost to provide information should be weighed against the benefit that users willgain from having the information available.5. select an option Relevance Cost Constraint Faithful Representation Comparability Going Concern Assumption Consistency Periodicity Assumption Full Disclosure Principle Materiality Monetary Unit Assumption Economic Entity Assumption Historical Cost Principle A company’s use of the same accounting principles from year to year.6. select an option Consistency Periodicity Assumption Cost Constraint Historical Cost Principle Materiality Full Disclosure Principle Going Concern Assumption Faithful Representation Economic Entity Assumption Relevance Monetary Unit Assumption Comparability Assets are recorded and reported at original purchase price.7. select an option Full Disclosure Principle Monetary Unit Assumption Historical Cost Principle Materiality Consistency Periodicity Assumption Relevance Going Concern Assumption Economic Entity Assumption Comparability Faithful Representation Cost Constraint Accounting information should help users predict future events, and should confirm or correctprior expectations.8. select an option Consistency Comparability Materiality Full Disclosure Principle Going Concern Assumption Faithful Representation Relevance Economic Entity Assumption Historical Cost Principle Monetary Unit Assumption Cost Constraint Periodicity Assumption The life of a business can be divided into artificial segments of time.9. select an option ComparabilityMonetary Unit AssumptionEconomic Entity Assumption Periodicity Assumption Relevance Full Disclosure PrincipleGoing Concern Assumption Cost Constraint Consistency Historical Cost Principle Materiality Faithful Representation The reporting of all information that would make a difference to financial statement users.10. select an option RelevanceGoing Concern AssumptionConsistencyMonetary Unit Assumption Periodicity Assumption Historical Cost Principle Faithful Representation Comparability Materiality Full Disclosure Principle Economic Entity Assumption Cost Constraint The judgment concerning whether an item’s size makes it likely to influence a decision-maker.11. select an option Monetary Unit Assumption Comparability Relevance Full Disclosure Principle Materiality Cost Constraint Historical Cost Principle Periodicity Assumption Consistency Going Concern Assumption Economic Entity Assumption Faithful Representation Assumes a business will remain in operation for the foreseeable future.12. select an option Cost Constraint Going Concern Assumption Consistency Historical Cost Principle Economic Entity Assumption Monetary Unit Assumption Relevance Periodicity Assumption Materiality Comparability Faithful Representation Full Disclosure Principle Different companies use the same accounting principles.

Answer 1

1. Monetary Unit Assumption: Items not easily quantified in dollar terms are not reported in the financial statements.

2. Faithful Representation: Accounting information must be complete, neutral, and free from error.

3. Economic Entity Assumption: Personal transactions are not mixed with the company's transactions.

4. Cost Constraint: The cost to provide information should be weighed against the benefit that users will gain from having the information available.

5. Consistency: A company's use of the same accounting principles from year to year.

6. Historical Cost Principle: Assets are recorded and reported at original purchase price.

7. Relevance: Accounting information should help users predict future events, and should confirm or correct prior expectations.

8. Periodicity Assumption: The life of a business can be divided into artificial segments of time.

9. Full Disclosure Principle: The reporting of all information that would make a difference to financial statement users.

10. Materiality: The judgment concerning whether an item's size makes it likely to influence a decision-maker.

11. Going Concern Assumption: Assumes a business will remain in operation for the foreseeable future.

12. Comparability: Different companies use the same accounting principles.