The Stable Monetary Unit Assumption

question 5

Multiple Choice

The stable monetary unit assumption:

• A)ensures that accounting records and statements are based on the most reliable data available.
• B)holds that the entity will remain in operation for the foreseeable future.
• C)maintains that each organization or section of an organization stands apart from other organizations and individuals.
• D)enables accountants to ignore the effect of inflation on the accounting records.

---

Definitions:

Common Stock

Common Stock represents ownership shares in a corporation, giving holders voting rights and a share in the company's profits through dividends.

Revenues

The total income generated from normal business operations and other activities, such as the sale of goods or services.

Credit

An accounting entry that either increases a liability or equity account, or decreases an asset or expense account. It is also used in banking to denote a positive balance.

Debits

Financial entries that represent an increase in assets or expenses or a decrease in liabilities, equity, or income on a company's balance sheet or income statement.