Which assumption which underlies GAAP is being violated if a United States company reports assets on its balance sheet in terms of how many assets are owned rather than with a measurement in terms of dollars?

Question

Cullen Valenzuela

Business

29 August, 07:58

Which assumption which underlies GAAP is being violated if a United States company reports assets on its balance sheet in terms of how many assets are owned rather than with a measurement in terms of dollars?

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Answers (1)

Know the Answer?

Theodore Hogan · Answer 1

The correct answer is: monetary unit assumption.

Explanation:

The monetary unit assumption is an accounting principle derived from the General Accepted Accounting Principles (GAAP) that states business transactions must be recorded according to the monetary unit the company decides to record its transactions with. The principle establishes that the financial language is only money.