(a) Qualitative Characteristic Being Employed When Companies in the Same Industry Are Using the Same Accounting Principles.
(a) | Qualitative characteristic being employed when companies in the same industry are using the same accounting principles. | Comparability | (b) | Quality of information that confirms users' earlier expectations. | Feedback value | (c) | Imperative for providing comparisons of a company from period to period. | Consistency | (d) | Ignores the economic consequences of a standard or rule. | Neutrality | (e) | Requires a high degree of consensus among individuals on a given measurement. | Verifiability | (f) | Predictive value is an ingredient of this primary quality of information. | Relevance | (g) | Two qualitative characteristics that are related to both relevance and reliability. | Comparability and Consistency | (h) | Neutrality is an ingredient of this primary quality of accounting information. | Reliability | (i) | Two primary qualities that make accounting information useful for decision-making purposes. | Relevance and Reliability | (j) | Issuance of interim reports is an example of what primary ingredient of relevance? | Timeliness |
1. Economic entity assumption | 5. Historical cost principle | 9. Cost-benefit relationship | 2. Going concern assumption | 6. Matching principle | 10. Materiality | 3. Monetary unit assumption | 7. Expense recognition principle | 11. Industry practices | 4. Periodicity assumption | 8. Full disclosure principle | 12. Conservatism |
Identify by number the accounting assumption, principle, or constraint that describes each situation below. Do not use a number more than once. (a) | Allocates expenses to revenues in the proper period. | 7 | (b) | Indicates that fair value changes subsequent to purchase are not recorded in the accounts. (Do not use revenue recognition principle.) | 5 | (c) | Ensures that all relevant financial information is reported. | 8 | (d) | Rationale why plant assets are not reported at liquidation value. (Do not use historical cost principle.) | 2 | (e) |
1. Economic entity assumption | 5. Historical cost principle | 9. Cost-benefit relationship | 2. Going concern assumption | 6. Matching principle | 10. Materiality | 3. Monetary unit assumption | 7. Expense recognition principle | 11. Industry practices | 4. Periodicity assumption | 8. Full disclosure principle | 12. Conservatism |
Identify by number the accounting assumption, principle, or constraint that describes each situation below. Do not use a number more than once. (a) | Allocates expenses to revenues in the proper period. | 7 | (b) | Indicates that fair value changes subsequent to purchase are not recorded in the accounts. (Do not use revenue recognition principle.) | 5 | (c) | Ensures that all relevant financial information is reported. | 8 | (d) | Rationale why plant assets are not reported at liquidation value. (Do not use historical cost principle.) | 2 | (e) |