1. The following phrases describe an assumption, principle, or constraint of financial reporting. In the space
provided at right, write the correct assumption, principle or constraint that is defined or indicated.
Be specific! (1 pt. each)
A. A company will remain in business for the
foreseeable future. ________________________________
B. When there is a question about how to account for
a transaction, the accountant should select the
treatment that will be least likely to overstate
income or overstate assets. _________________________________
C. It provides a yardstick to measure amounts in
financial statements, the dollar in the United States ________________________________
D. Allows the company to report revenues and
expenses for a particular period. _________________________________