Horngren's Accounting: The Managerial Chapters Plus MyLab Accounting with Pearson eText -- Access Card Package (12th Edition)
Horngren's Accounting: The Managerial Chapters Plus MyLab Accounting with Pearson eText -- Access Card Package (12th Edition)
12th Edition
ISBN: 9780134675794
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 1, Problem S1.5SE

Applying accounting assumptions and principles
Learning Objective 2
Michael McNamee is the proprietor of a property management company, Apartment Exchange, near the campus of Pensacola State College. The business has cash of $8,000 and furniture that cost $9,000 and has a market value of $13,000. The business debts include accounts payable of $6,000. Michael’s personal home is valued at $400,000, and his personal bank account has a balance of $1,200.
Consider the accounting principles and assumptions discussed in the chapter, and identify the principle or assumption that best matches the situation:

  1. Michael’s personal assets are not recorded on the Apartment Exchange’s balance sheet.
  2. The Apartment Exchange records furniture at its cost of $9,000, not its market value of $13,000
  3. The Apartment Exchange reports its financial statements in U.S. dollars.
  4. Michael expects the Apartment Exchange to remain in operation for the foreseeable future.

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Chapter 1 Solutions

Horngren's Accounting: The Managerial Chapters Plus MyLab Accounting with Pearson eText -- Access Card Package (12th Edition)

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