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Exercise 4-02 Identify the accounting concept that describes each situation below. Do not use any concept...

Exercise 4-02 Identify the accounting concept that describes each situation below. Do not use any concept more than once. a. Is the rationale for why plant assets are not reported at liquidation value. (Do not use the historical cost principle.) choose the accounting concept b. Indicates that personal and business recordkeeping should be separately maintained. choose the accounting concept c. Ensures that all relevant financial information is reported. choose the accounting concept d. Assumes that the dollar is the “measuring stick” used to report on financial performance. choose the accounting concept e. Requires that accounting standards be followed for all items of significant size. choose the accounting concept f. Separates financial information into time periods for reporting purposes. choose the accounting concept g. Requires recognition of expenses in the same period as related revenues. choose the accounting concept h. Indicates that fair value changes subsequent to purchase are not recorded in the accounts. choose the accounting concept Click if you would like to Show Work for this question: Open Show Work

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Expert Solution

  1. Is the rationale for why plant assets are not reported at liquidation value. (Do not use the historical cost principle.)

Answer : Going concern concept

  1. Indicates that personal and business recordkeeping should be separately maintained.

Answer : Business Entity concept

  1. Ensures that all relevant financial information is reported.

Answer : Realisation concept

  1. Assumes that the dollar is the “measuring stick” used to report on financial performance.

Answer : Money measurement concept

  1. Requires that accounting standards be followed for all items of significant size.

Answer : Dual Aspect concept

  1. Separates financial information into time periods for reporting purposes.

Answer : Accounting year concept

g. Requires recognition of expenses in the same period as related revenues.

Answer : Matching concept

h. Indicates that fair value changes subsequent to purchase are not recorded in the accounts

Answer : Cost concept

ekkarill92 answered 1 year ago
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