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Understanding Accounting Assumptions Instructions In your working papers, indicate the
Chapter 2, Problem 2-5(choose chapter or problem)
Understanding Accounting Assumptions
Instructions In your working papers, indicate the assumption from the list below that best matches each numbered statement.
Accounting Period
Business Entity
Going Concern
1. Accounting reports may cover a month, a quarter, or a year.
2. Accountants expect a business to last indefinitely.
3. The personal property of a business owner is not included in the accounting records of the business.
4. The business has been in operation for several years and is expected to continue.
5. An owner’s personal activities or properties are not mixed with the business activities or properties.
6. The accountants report shows how much profit the business earned for one month.
Questions & Answers
QUESTION:
Understanding Accounting Assumptions
Instructions In your working papers, indicate the assumption from the list below that best matches each numbered statement.
Accounting Period
Business Entity
Going Concern
1. Accounting reports may cover a month, a quarter, or a year.
2. Accountants expect a business to last indefinitely.
3. The personal property of a business owner is not included in the accounting records of the business.
4. The business has been in operation for several years and is expected to continue.
5. An owner’s personal activities or properties are not mixed with the business activities or properties.
6. The accountants report shows how much profit the business earned for one month.
ANSWER:Step 1 of 2
The parameters designed by the authorized board of accounting under which the accounting activities are operated are known as accounting concepts. Such concepts are established to ensure consistency and uniformity in the accounting information of the business entities.