Economic Entity Assumption Monetary Unit Assumption Historical Cost Principle Going Concern Assumption Revenue Recognition Principle Full Disclosure Principle Time Period Assumption Matching Principle Required:
Economic Entity Assumption Monetary Unit Assumption Historical Cost Principle Going Concern Assumption Revenue Recognition Principle Full Disclosure Principle Time Period Assumption Matching Principle Required:
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter2: Financial Reporting: Its Conceptual Framework
Section: Chapter Questions
Problem 2E
Related questions
Question
Listed below are the current Accounting Assumptions and Principles | ||||||||||
Economic Entity Assumption | Monetary Unit Assumption | Historical Cost Principle | ||||||||
Going Concern Assumption | Revenue Recognition Principle | Full Disclosure Principle | ||||||||
Time Period Assumption | Matching Principle | |||||||||
Required: | ||||||||||
For the following situations, identify whether the situation represents a violation or a correct application of GAAP, and which assumption/principle is applicable. |
h. Nixon Corp records and maintains their books at cost and/or current value, not at a liquidated value. | ||||
Violation: (Yes/No) | ||||
Applicable Assumption/Principle: | ||||
i. Wages of $4,000 related to the last two days of July, were recorded as expense in July even though they were paid in August. | ||||
Violation: (Yes/No) | ||||
Applicable Assumption/Principle: | ||||
j. Revenues are recorded when they are earned and realizable, regardless of when cash it received. | ||||
Violation: (Yes/No) | ||||
Applicable Assumption/Principle: | ||||
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