Each of the Following Statements Is Justified by a Concept

question 10

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.
_____ 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.

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Definitions:

Financial Reports

Financial reports are formal records of the financial activities and position of a business, person, or other entity.

Public Accountants

Professionals who provide accounting services to the general public, including auditing, tax preparation, and consulting services.

Balance Sheet

A financial statement that presents a company's assets, liabilities, and shareholders' equity at a specific point in time.