Over Time, Accounting Standards Have Developed to Reflect Changes in the Business

question 15

Essay

Over time, accounting standards have developed to reflect changes in the business world as well as changes in our ability to account for such changes. Using the example of marking assets and liabilities to their fair value, explain why you would expect accounting standards to change.

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Definitions:

Law of Supply

An economic principle stating that as the price of a good or service increases, the quantity supplied of that good or service also increases, all else being equal.

Price-Elasticity

A measure of the responsiveness of demand or supply of a good or service to changes in its price.

Supply

The total amount of a product or service that is available for purchase within a market.

Glass Company

A business that specializes in the production and processing of glass products.