Accounting Conceptual Framework

Question 1

Inflation makes which of the following assumptions questionable?
- Going concern
- Economic entity
- Unit-of-measure
- None of the above

Answer 1

Unit-of-measure

The unit-of-measure assumption presupposes that costs incurred at different points in time are intermingled in the accounts, and thus, it must be assumed that the purchasing power of the dollar remains constant over time. Inflation makes this assumption questionable.

Question 2

Which of the following is not included in the FASB Accounting Standards Codification?
- FASB Statements
- FASB Technical Bulletins
- FASB Interpretations
- FASB Statements of Financial Accounting Concepts

Answer 2

FASB Statements of Financial Accounting Concepts

FASB Statements of Financial Accounting Concepts are not part of the FASB Accounting Standards Codification. FASB Statements, Technical Bulletins, and Interpretations are part of the FASB Accounting Standards Codification.