The Stable-Monetary-Unit Assumption

question 42

Multiple Choice

The stable-monetary-unit assumption:

• A)ensures that accounting records and statements are based on the most reliable data available.
• B)requires all entities to record transactions in U.S. dollars.
• C)maintains that each organization or section of an organization stands apart from other organizations and individuals.
• D)enables accountants to ignore the effect of inflation on the accounting records.

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Definitions:

Price of X

The amount of money required to purchase a product or service named X.

Consumption of Y

Represents the amount or volume of good Y that is utilized or consumed over a period.

Utility Function

A mathematical representation that ranks an individual's preferences for various goods and services, aiming to measure their level of satisfaction.

Units of X

A quantitative measure used to express the amount of a variable or entity X.