BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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useless in measuring an economic event.
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the common unit of measure for all business transactions.
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a poor measure of economic activities.
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unrelated to business transactions.
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Detailed explanation-1: -There are four basic assumptions of financial accounting: (1) economic entity, (2) fiscal period, (3) going concern, and (4) stable dollar. These assumptions are important because they form the building blocks on which financial accounting measurement is based.
Detailed explanation-2: -The monetary unit principle is the assumption that money itself is treated as a unit of measurement, and that all transactions or economic events recorded in the accounts of a business can be expressed and measured in monetary terms by a currency.
Detailed explanation-3: -The going concern assumption is a fundamental assumption in the preparation of financial statements.
Detailed explanation-4: -Answer and Explanation: The answer is E. Time period assumption.