9. The unit-of-measure assumption states that financial information is reported in the national monetary unit. True False 10. The separate-entity assumption assumes a stable monetary unit (not affected by inflation or deflation). True False 11. Three of the four basic assumptions that underlie accounting measurement and reporting relate to the statement of financial position. True False 12. The amount shown on the balance sheet as shareholders' equity represents the current market value of the owners' residual claim against the company. True False 13. Prepayments (e.g., insurance premiums and rent paid in advance of use of a building) reflect available benefits (e.g., monthly insurance protection, office space) that the company will use within one year. True False 14. Transactions have a dual economic effect on the fundamental accounting True False 15. The payment of a liability in cash will decrease owners' equity. True 16. The basic system of recording transactions has withstood the test of time, and has been in use for more than 500 years. True False 17. If you trade your computer plus cash for a new car, the cost of the new car is equal to the cash paid plus the market value of the computer. True False
9. The unit-of-measure assumption states that financial information is reported in the national monetary unit. True False 10. The separate-entity assumption assumes a stable monetary unit (not affected by inflation or deflation). True False 11. Three of the four basic assumptions that underlie accounting measurement and reporting relate to the statement of financial position. True False 12. The amount shown on the balance sheet as shareholders' equity represents the current market value of the owners' residual claim against the company. True False 13. Prepayments (e.g., insurance premiums and rent paid in advance of use of a building) reflect available benefits (e.g., monthly insurance protection, office space) that the company will use within one year. True False 14. Transactions have a dual economic effect on the fundamental accounting True False 15. The payment of a liability in cash will decrease owners' equity. True 16. The basic system of recording transactions has withstood the test of time, and has been in use for more than 500 years. True False 17. If you trade your computer plus cash for a new car, the cost of the new car is equal to the cash paid plus the market value of the computer. True False
test-bank-financial-accounting-4th-libby.docx