Question

Match each item (characteristics, assumptions, principles, and constraint guide the FASB when it creates accounting standards) with a description below. Items not easily quantified in dollar terms are not reported in the financial statements. Accounting information must be complete, neutral, and free from error. Personal transactions are not mixed with the company's transactions. The cost to provide information should be weighed against the benefit that users will gain from having the information available. A company's use of the same accounting principles from year to year. Assets are recorded and reported at original purchase price. Accounting information should help users predict future events, and should confirm or correct prior expectations. The life of a business can be divided into artificial segments of time. The reporting of all information that would make a difference to financial statement users. The judgment concerning whether an item's size makes it likely to influence a decision-maker. 10. Assumes a business will remain in operation for the foreseeable future. 12. Different companies use the same accounting principles. Materiality Clic Economic Entity Assumption ork for this question Open Show Work Going Concern Assumption Faithful Representation Cost Constraint Historical Cost Principle Monetary Unit Assumption Comparability Question Attempts: 0 of 3 used SAVE FOR LATER Full Disclosure Principle Relevance olicy Consistency nca All Rights Reserved. A Division of John Wiley & Sons Inc. Periodicity Assumption

Answer 1

Answer:

The answers are,

Items not easily quantified in dollar terms are not reported in the financial statements.

Monetary Unit Assumption

Accounting information must be complete, neutral, and free from error.

Faithful representation

Personal transactions are not mixed with the company's transactions.

Entity Assumption

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

Cost constraint

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

Consistency

Assets are recorded and reported at original purchase price.

Historical Cost

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

Relevance

The life of a business can be divided into artificial segments of time.

Periodicity assumption

The reporting of all information that would make a difference to financial statement users.

Full Disclosure principle

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

Materiality

10. Assumes a business will remain in operation for the foreseeable future.

Going concern

12. Different companies use the same accounting principles

Comparability

Explanation: