Thirty Years Ago,Citywide Grocery Company Purchased a Building for Its

question 18

Multiple Choice

Thirty years ago,Citywide Grocery Company purchased a building for its grocery store for $30,000.Based on inflation estimates,the amount of the building has been adjusted in the accounting records.The building is now reported at $75,000 in Citywide's financial statements.Which of the following concepts or principles of accounting is being violated?

• A) going concern assumption
• B) revenue realization concept
• C) economic entity assumption
• D) cost principle

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Definitions:

Units of Variable K

In economics, this refers to units of a variable factor of production (K often denotes capital), where the quantity can be changed in the short run to increase or decrease production.

Units of Output

The quantity of goods or services produced by an entity in a given period of time.

Marginal Cost

The cost associated with producing an additional unit of a product or service.

Diminishing

Refers to a reduction or decrease over time.