Answer
a. Historical cost principle: This principle does not permit the accommodation of fair value changes.
b. Full disclosure principle. The provision of satisfactory and comprehensible details minimizes the chances of investors being deceived about the authentic position of an entity.
c. Expense recognition principle. Amortized costs are incurred periodically; they fall under period costs.
d. Fair value principle. Fair values will reflect the factual market worth of the crops.
e. Economic unit assumption. Enterprises are distinguishable entities from their proprietors; thus, their reports should be distinct.
f. Full disclosure principle. Users ought to have satisfactory information regarding post-balance-sheet events because they add weight to their decision-making.
g. Revenue recognition principle. The delivery of the product corroborates that the obligation has been fulfilled; thus, the revenue associated with the product can be documented.
h. Full disclosure principle. Providing adequate particulars about the bond indentures aligns with the full disclosure principle.
i. Revenue recognition principle. This canon of recognizing revenue once it is earned (although it is not paid in cash) endorses accrual accounting.
j. Economic unit assumption. Consolidated statements belong to a single entity with diverse subsidiaries, so the economic unit assumption applies.
k. Periodicity. Periodic reporting delivers information about the economic standing of a corporation for suitable actions to be taken by users.
l. Full disclosure principle. Users should have sufficient knowledge about the quantity of debts that are doubtful.
m. Historical cost principle. The price of goodwill that is documented is the acquisition (historical cost).
n. Expense recognition principle. The sale commission is a period cost with no straightforward association with the product.
Work Step by Step
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