Reference no: EM132642620

Question 1: ______ is an exception to the principles of accounting measurement stating that when in doubt, financial statements should understate assets, overstate liabilities, accelerate the recognition of losses, and delay the recognition of gains.

Question 2: ______ is the amount of goods and services a monetary amount can buy at a given point in time. See Inflation.

Question 3: The ______ principle is a measurement principle of financial accounting stating that performance is measured by ______ efforts against benefits in the time period in which the benefits are realized. Net income on the income statement is the result of ______ expenses against revenues in the time period when the revenues are realized. The ______ principle is applied by first recognizing revenues and then ______ against those revenues the expenses required to generate them.

Question 4: ______ is an exception to the principles of financial accounting stating that only those transactions dealing with dollar amounts large enough to make a difference to financial statement users need be accounted for in a manner consistent with GAAP. The dollar amounts of some transactions are so small that the method of accounting has virtually no impact on the decisions based upon information in the financial statements. Such transactions are referred to as immaterial, and management is allowed to account for them as expediently as possible.

Question 5: ______ is a principle of accounting measurement stating that, although there is considerable choice among accounting methods, companies should choose a set of methods and use them from one period to the next. ______ helps financial statement users to make useful comparisons across time.

Question 6: ______ is the current price a company would have to pay in the input market to replace an existing asset while maintaining operations at the present level.

Question 7: The ______ is where an entity purchases the inputs for its operations. Historical cost, which is used extensively on the balance sheet, represents the cost of a company's inputs (e.g., inventory and long-lived assets) when they were acquired previously. Replacement cost, which is used selectively on the balance sheet (e.g., lower of cost or market applied to inventory), represents the current cost of a company's inputs.