Accounting Test 1

The personal assets of the owner of a company will not appear on the company's balance sheet because of which principle/guideline?

Which principle/guideline requires a company's balance sheet to report its land at the amount the company paid to acquire the land, even if the land could be sold today at a significantly higher amount?

Which principle/guideline allows a company to ignore the change in the purchasing power of the dollar over time?

Which principle/guideline is associated with the assumption that the company will continue on long enough to carry out its objectives and commitments?

Which principle/guideline directs a company to show all the expenses related to its revenues of a specified period even if the expenses were not paid in that period?

A company sold merchandise of $8,000 to a customer in December. The company's sales terms require the customer to pay the company in 30 days. The company's income statement reported the sale in December. This is proper under which accounting principle/guideline?

An asset with a cost of $120,000 is depreciated over its useful life of 10 years rather than expensing the entire amount when it is purchased. This complies with which principle/guideline?

Under the accrual basis of accounting, revenues are reported in the accounting period when the

Accrual accounting is based on this principle/guideline.

Assets are usually reported on the balance sheet at which amount?