The Following Accounting Principles and Assumptions Are Included in the Conceptual

question 71

Essay

The following accounting principles and assumptions are included in the conceptual framework of accounting:
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$\text { Economic entity } \quad \text { Going concern } \quad \text { Cost principle }$
$\text { Monetary unit } \quad \text { Time period }$ For each situation in A through C below,identify which assumption or principle applies by selecting from the list provided above,and explain why that assumption or principle applies.
A) Global Corp. has divisions in several countries around the world. Each of these countries has a currency different from the U.S. dollar. Global Corp. is a U.S. company and must include the financial data of its worl dwide divisions in its financial statements.
B) Steve and Mike operate a security business as a partnership. They are considering the advantages of changing over to the corporate form of business.
C) Island Pasta is a locally owned and operated fast-food business. The owners have decided to expand into nearby cities. Expansion will require more capital, but management doesn't expect it will stay in business for more than a year or so regardless of whether it expands or not.

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Definitions:

Digital Citizenship

The conscientious application of technology by individuals utilizing computers, the Internet, and digital gadgets to interact with the community at any capacity.

Political Knowledge

The awareness and understanding individuals have about political processes, principles, policies, and leaders.

Digital Divide

The gap between individuals who have access to modern information and communication technology and those who lack access, affecting opportunities in education, healthcare, and employment.

Federal Government

The national government of a federated state, which holds the authority over the entire nation and is responsible for areas such as defense, foreign policy, and interstate commerce.