The Four Assumptions Financial Statement Users Should Be Able to Assume

question 15

Multiple Choice

The four assumptions financial statement users should be able to assume that preparers of the statements have made in preparing the statements that are listed by the FASB's conceptual framework are

• A) separate economic entity, going concern, monetary unit, and periodicity of income.
• B) conservatism, matching principle, revenue recognition principle, and periodicity of income.
• C) conservatism, cost-benefit test, full disclosure principal, and industry practice constraint.
• D) historical cost basis, materiality realization, and transparency.

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Definitions:

STIs (Sexually Transmitted Infections)

Infections that are primarily spread through sexual contact, including viruses, bacteria, and parasites.

Binge-Eating Disorder

A serious eating disorder characterized by recurrent episodes of eating large quantities of food (often very quickly and to the point of discomfort); a feeling of a loss of control during the binge; experiencing shame, distress, or guilt afterward; and not regularly using unhealthy compensatory measures (e.g., purging) to counter the binge eating.

Depression

Depression is a common and serious mood disorder that affects a person's feelings, thoughts, and behaviors, potentially leading to various emotional and physical problems.

Primary Sex Characteristics

The parts of the body that are directly involved in reproduction, including the vagina, uterus, ovaries, testicles, and penis.