The Monetary Assumption

question 178

Multiple Choice

The monetary assumption:

• A) Means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.
• B) Presumes that the life of a company can be divided into time periods, such as months and years, and that useful reports can be prepared for those periods.
• C) Means that we can express transactions and events in monetary, or money, units.
• D) Prescribes that a company record the expenses it incurred to generate the revenue reported.
• E) Means that a business is accounted for separately from other business entities, including its owner.

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Definitions:

Ultimate Consumer

The final purchaser and user of a product or service, as opposed to an intermediary or a business buyer.

Newspaper Reporter

A professional tasked with investigating, writing, and reporting news stories for newspapers or news websites.

Plane Ticket

A document issued by an airline or a travel agency to confirm an individual's reservation for a specific flight.

Offering Available

Refers to the range of products or services that a company makes accessible to its customers.