Acct 229 Final TAMU questions with correct answers

Materiality CORRECT ANSWER The dollar magnitude of the transaction makes a difference in how it is recorded. Record as an expense not an asset. No party would be mislead. Ex. buying a 10 dollar trash can Monetary Unit CORRECT ANSWER Only transactions that can be expresses in terms of money can be included in the accounting records. Time Period Assumption CORRECT ANSWER The long life of a company can be reported over a series of shorter time periods. Makes it possible to prepare the income statement for a specific time period. Going Concern Assumption CORRECT ANSWER The company will not go out of business in the near future. Historical Cost Principle CORRECT ANSWER Record assent at the cost paid to acquire them. Understandability CORRECT ANSWER Information should be comprehensible to those who are wiling to spend time to understand it. Consistency CORRECT ANSWER Allows comparisons within a company from one accounting period to the next. Once we select an accounting method stay with it. Comparability CORRECT ANSWER Allows