Each of the Following Statements Is Justified by a Concept

question 82

Essay

Each of the following statements is justified by a concept or convention of accounting. Write the letter in the blank next to each statement corresponding to the concept or convention involved.
a. Consistency
b. Materiality
c. Conservatism
_____ 1. This convention best enhances comparability of financial statements between years.
_____ 2. A merger agreed on just after the balance sheet date nevertheless is reported in the notes to the financial statements.
_____ 3. A company forgoes hiring another full-time accountant, which would add only slightly to the financial statements' accuracy.
_____ 4. A company uses lower-of-cost-or-market to value inventory.
_____ 5. A large company rounds its financial statement figures to the nearest $10,000.
d. Full disclosure
e. Cost-benefit

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Definitions:

Temperament

Temperament involves the innate aspects of an individual's personality, such as their habitual patterns of emotion, attention, and behavior.

Andropause

A term sometimes used to describe aging-related hormone changes in men, similar to menopause in women.

Reduced Sperm Count

A medical condition characterized by a lower than normal concentration of sperm in a man's ejaculate, potentially leading to fertility issues.

Hormone Production

The biological process by which hormones are synthesized and secreted in the body, regulating various bodily functions.