Identify the accounting assumption or principle that is described below.

(a) select the accounting assumption or principle Belief that a company will remain in business for the foreseeable future. (Note: Do not use the historical cost principle.)

(b) select the accounting assumption or principle Indicates that personal and business recordkeeping should be separately maintained.

(c) select the accounting assumption or principle Only those things that can be expressed in money are included in the accounting records.

(d) select the accounting assumption or principle Separates financial information into time periods for reporting purposes.

(e) select the accounting assumption or principle Measurement basis used when a reliable estimate of fair value is not available.

(f) select the accounting assumption or principle Dictates that companies should disclose all circumstances and events that make a difference to financial statement users.

The answers are:

A) Going concern principle

B) Economic entity principle

C) Monetary unit principle

D) Time period principle

E) Historical Cost principle

F) Full disclosure principle

Explanation:

Going concern principle: A business will remain in operation for the foreseeable future. This justifies deferring the recognition of some expenses, such as depreciation, until later periods. Otherwise, you would have to recognize all expenses at once and not defer them.

Economic entity principle: The transactions of a business should be kept separate from those of its owners and other businesses. This prevents intermingling of assets and liabilities among multiple entities.

Monetary unit principle: A business should only record transactions that can be stated in terms of a unit of currency. This concept keeps a business from engaging in an excessive level of estimation in deriving the value of its assets and liabilities.

Time period principle: A business should report the results of its operations over a standard period of time. It is intended to create a standard set of comparable periods.

Historical Cost principle: A business should only record its assets, liabilities, and equity investments at their original purchase costs.

Full disclosure principle: A business should include in or alongside its financial statements all the information that may impact a reader's understanding of those statements.