Each of the Situations in a Through C Below Applies

question 5

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 Canadian company that has divisions in several countries around the world. Each country has a currency different that the Canadian dollar. The company must include the financial data of its worldwide divisions in its financial statements.

B) Howell Trucking operates 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 vear or so regardless of its expansion plans

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Definitions:

Temporary Activation

A state or condition of being enabled or made active for a limited period.

Temporary

Lasting for a limited period of time; not permanent or enduring.

Physiological

Related to the functions and activities of living organisms and their parts, including all physical and chemical processes.

Temporary

Something not permanent or lasting only for a limited period of time.