Question

Enter the letter A through H for the principle or assumption in the blank space next to each numbered description that it best reflects.

A. General accounting principle

B. Cost principle

C. Business entity assumption

D. Revenue recognition principle

E. Specific accounting principle

F. Matching (expense recognition) principle

G. Going-concern assumption

H. Full disclosure principle

1. A company reports details behind financial statements that would impact users’ decisions.

2. Financial statements reflect the assumption that the business continues operating.

3. A company records the expenses incurred to generate the revenues reported.

4. Derived from long-used and generally accepted accounting practices.

5. Each business is accounted for separately from its owner or owners.

6. Revenue is recorded when products and services are delivered.

7. Usually created by a pronouncement from an authoritative body.

8. Information is based on actual costs incurred in transactions.

Short answer

Cost principle records assets at the cost on which they are purchased and the description of them is matched with the relevant principle or assumption.

Step-by-step solution

Definition of Cost Principle

The cost principle is an accounting principle that states that assets should be recorded at the amount on which they are initially acquired.

Description of principle or assumption

S.no	Principle or Assumption
1.	H. Full Disclosure principle
2.	G. Going-Concern Assumption
3.	F. Matching (expense recognition) Principle
4.	A. General Accounting Principle
5.	C. Business Entity Assumption
6.	D. Revenue Recognition Principle
7.	E. Specific Accounting Principle
8.	B. Cost Principle