Each of the Situations in a Through C Below Applies

question 24

Essay

Each of the situations in A through C below applies to one of the assumptions or principles included in the conceptual framework of accounting. Identify which assumption or principles applies and explain why that assumption or principle applies.
A)High Collectibles is a U.S. company that has divisions in several countries around the world. Each country has a currency different that the U.S. dollar. The company must include the financial data of its worldwide divisions in its financial statements.
B)Howell Trucking operate as a partnership. The partners are considering a change to the corporate form of business organization.
C)Holly Company is a local company. The owners have decided to expand into nearby cities. Expansion will require more capital, but management does not expect it will stay in business for more than one year or so regardless of its expansion plans.

• A)High Collectibles is a U.S. company that has divisions in several countries around the world. Each country has a currency different that the U.S. dollar. The company must include the financial data of its worldwide divisions in its financial statements.
• B)Howell Trucking operate as a partnership. The partners are considering a change to the corporate form of business organization.
• C)Holly Company is a local company. The owners have decided to expand into nearby cities. Expansion will require more capital, but management does not expect it will stay in business for more than one year or so regardless of its expansion plans.