Accounting in Action

Answers

The Monetary unit assumption requires that companies include in the accounting records only transaction data that can be expressed in money terms. This assumption enables accounting to quantify economic events. The monetary unit assumption is vital to applying the historical cost principle.

This prevents the inclusion of some relevant inforamation in the accounting records.

Problems: Accounting in Action

Problem-1: Accounting in Action

On April 1, Julie Spengel established Spengel's Travel Agency. The following transactions were completed during the month: Invested $15,000 cash to start the agency Paid $600 cash for April office...

Problem-2: Accounting in Action

Judi Salem opened a law office on July 1, 2018. On July 31, the balance sheet showed Cash $5,000, Account Receivable $1,500, Supplies $500, Equipment $6,000, Accounts Payable $4,200 and...

Problem-3: Accounting in Action

On June 1, Cindy Godfrey started Divine Designs Co., a company that provides cash opportunities by investing $12000 cash in the business. Following are the assets and liabilities of the...

Problem-4: Accounting in Action

Trixie Maye started her own consulting firm, Matrix Consulting, on May 1, 2018. The following transactions occurred during the month of May Trixie invested $7,000 cash in the business. Paid...

Problem-5: Accounting in Action

Financial statement information about four different companies is as follows: Instructions Determine the missing accounts. Prepare the owner's equity statement for Alpha company

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