E1.8 (LO 3) (Assumptions, Principles, and Constraint) Presented below are the assumptions, principles, and constraint used in this chapter.

E1.8 (LO 3) (Assumptions, Principles, and Constraint) Presented below are the assumptions, principles, and constraint used in this chapter.Instructions Identify by number the accounting assumption, principle, or constraint that describes each situation in the following list. Do not use a number more than once.

Allocates expenses to revenues in the proper period.

Expense Recognition Principle.

Indicates that fair value changes subsequent to purchase are not recorded in the accounts. (Do not use revenue recognition principle.)

Historical cost

Ensures that all relevant financial information is reported

Full discousure Principle

Rationale why plant assets are not reported at liquidation value. (Do not use historical cost principle.)

Going concern asumption

Indicates that personal and business record keeping should be separately maintained.

Economic Entity assumption

Separates financial information into time periods for reporting purposes.

Peridiocity Assumption

Assumes that the dollar is the “measuring stick” used to report on financial performance

Monetary Unit Assumption