E2-7

27 January 2023
4.4 (120 reviews)
15 test answers

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question
Fair value changes are not recognized in the accounting records.
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historical cost principle
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Financial information is presented so that investors will not be misled.
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full disclosure principle
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Intangible assets are capitalized and amortized over periods benefited.
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expense recognition principle
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Repair tools are expensed when purchased.
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materiality
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Agricultural companies use fair value for purposes of valuing crops.
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industry practices & fair value principle
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Each enterprise is kept as a unit distinct from its owner or owners.
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economic entity assumption
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All significant post balance sheet events are reported.
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full disclosure principle
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Revenue is recorded at point of sale.
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revenue recognition principle
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All important aspects of bond indentures are presented in financial statements.
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full disclosure principle
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Rationale for accrual accounting.
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revenue principle & expense recognition
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The use of consolidated statements is justified.
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economic entity assumption
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Reporting must be done at defined time intervals.
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periodicity assumption
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An allowance for doubtful accounts is established.
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expense recognition principle
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Goodwill is recorded only at time of purchase.
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historical cost principle
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A company charges its sales commission costs to expense.
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expense recognition principle