Tate Corporation Purchased a Building for Its Grocery Store for $30,000

question 102

Multiple Choice

Tate Corporation purchased a building for its grocery store for $30,000 in 1970.Based on inflation estimates,the amount of this asset has been adjusted in the accounting records.The building is now reported at $75,000.Which of the following concepts or principles of accounting is being violated?

• A) Going-concern concept
• B) Stable monetary unit concept
• C) Entity concept
• D) None of the above

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Definitions:

Motivation

The internal drive or external stimuli that prompt and direct behavior towards achieving personal or organizational goals.

Partial Reinforcement

Means rewarding a behavior only part of the time rather than all the time (it can be applied to punishment as well, but the reward case is simpler).

Punishment

Punishment involves applying a negative consequence or removing a positive reinforcement in response to undesired behaviour, with the aim of reducing or eliminating that behaviour.

Agents

Representatives or intermediaries who act on behalf of others in various transactions or negotiations.