Which of the Following Concepts Applies to Situations 1-6 Below

question 136

Essay

Which of the following concepts applies to situations 1-6 below.
$\begin{array}{ll}\text { Entity } & \text { Periodicity } \\\text { Reliability } & \text { Stable monetary unit } \\\text { Going Concern } & \text { Cost-effectiveness constraint } \\\text { Materiality } &\end{array}$
1.Rhodes,Inc.acquired equipment with a fair market value of $22,000 and only paid $1,000 for the equipment at an auction.Following company policy which expenses assets with a cost of $1,000 or less,Rhodes,Inc.recorded an expense of $1,000.
2.McElwain,Inc.has divisions in several countries.Before publishing financial statements,McElwain,Inc.translates its divisional financial information to U.S.dollars.
3.Smith Enterprises,is experiencing financial difficulties due to poor economic conditions.The organization has been in existence for 50 years and has experienced these conditions in the past with little financial impact to the organization.Although Smith Enterprises may be impacted,there is no reason to believe that it will go bankrupt.
4.Komar Cable Company,owned by Katherine Hoots and Kate Coleman,each deposited $50,000 into the business's bank account.Both Katherine and Kate have access to the bank account and periodically transfer money from their personal accounts to the business account,but they never access the business account for personal use.
5.Mower Technology prepares monthly financial statements even though it is costly to do so.
6.Water Waste Systems only records accounting transactions when there is convincing evidence that can be verified by independent auditors.

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Definitions:

Endocrine System

A network of glands in the body that secrete hormones into the bloodstream to regulate processes such as growth, metabolism, and mood.

Extended Period

A length of time that is longer than usual or expected.

Messages

Units of communication intended to convey information, feelings, or instructions from one individual to another.

PET Scan

A medical imaging technique that uses radioactive substances to visualize and measure changes in metabolic processes and other physiological activities in the body.