00:04
Hello students, in this question we have to match the situation with the accounting term.
00:10
So the first situation says every year a business uses the same account, every year a business uses the same account name so it can evaluate result between years.
00:21
So the term for this is comparability characteristics.
00:25
So this term states that using the same account names we can compare the results between years.
00:41
Second, it's saying when we prepare a financial statement we show all the assets at the price we paid for them.
00:48
So we record the assets at the historic price at which they have been purchased.
00:54
So it name as historic price principle, not with the recent market price of the asset, it will be purchased with the historic price and it is recorded with that price only in the books.
01:09
Next situation says a business should not spend 1000 on counting and recounting 500 worth of inventory.
01:17
So the business should not spend 1000 on counting and recounting.
01:20
So it states cost -benefit constraint.
01:33
Next situation says if we record a truck on the financial statement at the price we could get for it, if we try to sell it quickly we are violating the accounting assumption...