Identify each of the following terms/phrases as either an
accounting: (a) principle, (b) assumption, or (c)...
Identify each of the following terms/phrases as either an
accounting: (a) principle, (b) assumption, or (c) constraint. 1.
Materiality 2. Time period 3. Benefit exceeds cost 4. Revenue
recognition
Identify the basic assumption or broad accounting principle that
was violated in each of the following situations.
1. Pastel Paint Company purchased land two years ago at a price
of $250,000 Because the value of the land has appreciated to
$400,000 the company has valued the land at$400,000 in it's most
recent balance sheet.
2. Atwell Corp has not prepared financial statements for
external users for over three years
3. The Klingon Company sells farm machinery Revenue from a large...
1. Match each of the following scenarios with the accounting
principle or accounting assumption that it best illustrates.
Scenario
Accounting Principle or Assumption
Several years after Thomas Company purchased new office
equipment, the company’s accounting records still show the original
purchase price.
The home of Rob Elliot, the owner of GGE Enterprises Inc., is
not listed among the company’s assets.
Despite several years of falling sales, Thomas Company
continues to forecast sales and make strategic plans to raise
revenues and...
a. Economic entity assumption g. Matching principle b. Going
concern assumption h. Full disclosure principle c. Monetary unit
assumption i. Relevance d. Periodicity assumption j. Verifiability
e. Historical cost principle k. Comparability f. Revenue
recognition principle l. Representational faithfulness m. Fair
Value Principle n. Control
Note that each principle or qualitative characteristic
may be matched to more than one phrase or not at all
____ 1. Measuring assets in dollars rather than units.
____ 2. Recognizing revenues when risks and...
Discuss the following accounting principles: Going Concern
Matching Principle
Monetary Unit Assumption
Full Disclosure Principle
Time Period Assumption
Revenue Recognition Principle
Matching Principle
Cost Principle
Relevance,Reliability and Consistency.
Principle of Conservatism
Materiality Principle.
Briefly explain the following items, and state whether the item
falls under accounting principle or assumption
Economic entity
Accrual basis accounting
Historical cost of an asset
Going concern
1. Define the following terms: (Chapter 14)
a. Accounting
b. Accrual basis of accounting
c. Asset management
d. Capital budget
e. Cash basis of accounting
f. Cash flow g. Financial accounting
h. Liquidity
i. Managerial accounting
j. Operating budget
For all of the following pairs of terms, define the two
phrases/terms and then explain the relationship between them.
1. Comparative Statics, Equilibrium Analysis, and Constrained
Optimization.
2. Perfect substitutes and Perfect Complements.
3. Diminishing Marginal rate of substitution and the Diminishing
Marginal Utility.
4. Transitivity and Convexity.
5. Indifference curves and Utility functions.
6. Essential and Inessential Goods
For all of the following pairs of terms, define the two
phrases/terms and then explain the relationship between them.
Compensating variation and Equivalent variation.
Returns to scale and Long run average cost.
Marginal Cost and Marginal Product
Marginal rate of technical substitution and Isoquant
Cost function and Conditional factor demands
Axion of Revealed Preference
a) define the phrases "revealed preferred" and "principle of
rationality"
b) Over a three-year period, an individual exhibits the
following consumption behavior:
price of X price of Y X Y
yr1 3 3 7 4
yr2 4 2 6 6
yr3 . 5 2 5 6 .
Is this behavior consistent with principle of rationality? Why
or why not?