Identify the accounting assumption or principle that is described below.(a)Belief that a company will remain in business for the foreseeable future. (Note:Do notuse the historical cost principle.)Indicates that personal and business recordkeeping should be separately(b)maintained.Only those things that can be expressed in money are included in the accounting(c)records.(d)Separates financial information into time periods for reporting purposes.(e)Measurement basis used when a reliable estimate of fair value is not available.(f)Dictates that companies should disclose all circumstances and events that make adifferenceto financial statement users.

Answered: (a) Belief that a company will remain…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter1: Accounting As A Form Of Communication

Section: Chapter Questions

Problem 1.15MCE

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Identify the accounting assumption or principle that is described below.
(a)
Belief that a company will remain in business for the foreseeable future. (Note:
Do not
use the historical cost principle.)
Indicates that personal and business recordkeeping should be separately
(b)
maintained.
Only those things that can be expressed in money are included in the accounting
(c)
records.
(d)
Separates financial information into time periods for reporting purposes.
(e)
Measurement basis used when a reliable estimate of fair value is not available.
(f)
Dictates that companies should disclose all circumstances and events that make a
difference
to financial statement users.

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Accounting assumptions and principles are the rules to be followed by the business organizations for conducting their day-to-day business operations effectively and for the preparation of financial statements. They ensure the consistency, reliability and accuracy of financial statements.

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