Answer
a. Matching principle. Expenses incurred in particular periods ought to be matched to specific revenues generated during the respective periods.
b. Historical cost principle. Fair value changes are not regarded under the historical cost principle.
c. Full disclosure principle. The provision of all the financial information enriches the marker of relevance, which is paramount in users' decision-making approaches.
d. Going concern assumption. An entity whose going concern is guaranteed cannot employ liquidation value when recording plant assets because its operations are guaranteed for the foreseeable future.
e. Economic entity assumption. Based on this assumption, the records of a business ought to be maintained in independent accounts and not be mixed up with personal records.
f. Periodicity assumption. Artificial time durations are utilized for reporting activities.
g. Monetary unit assumption. The dollar operates as an acknowledged denominator that delivers a universal basis for documenting financial transactions.
Work Step by Step
N/A
