Scenario 1 Lisa is a third-year college student living alone in an apartment. She works 20 hours a week at a local bank.

She makes $10 per hour. Lisa has a savings account that she built up during high school and by working

full-time summer jobs. During the school year, she withdraws $350 per month in order to help cover her

living expenses. Lisa's college tuition and books are covered by her scholarships. Lisa's parents help her by

providing an additional $500 a month. Lisa's parents also provide her health insurance. Lisa's fixed monthly

expenses are:

Rent.

$600

Insurance (renter's and ID theft)

$25

Car insurance

$110

Utilities

$60

Cell phone.

$60

Cable TV

$40

Lisa's budget must also include: Giving, Saving, Food, Gas, Entertainment and Personal

Identify the accounting assumption or principle that is described below. (a) select the accounting assumption or principle is the rationale for why plant assets are not reported at liquidation value. (note: do not use the historical cost principle.) (b) select the accounting assumption or principle indicates that personal and business record-keeping should be separately maintained. (c) select the accounting assumption or principle assumes that the dollar is the "measuring stick" used to report on financial performance. (d) select the accounting assumption or principle separates financial information into time periods for reporting purposes. (e) select the accounting assumption or principle measurement basis used when a reliable estimate of fair value is not available. (f) select the accounting assumption or principle dictates that companies should disclose all circumstances and events that make a difference to financial statement users.

An electronics store is running a promotion where for every video game purchased, the customer receives a coupon upon checkout to purchase a second game at a 50% discount. the coupons expire in one year. the store normally recognized a gross profit margin of 40% of the selling price on video games. how would the store account for a purchase using the discount coupon?

The purchasing agent for a company that assembles and sells air-conditioning equipment in a latin american country noted that the cost of compressors has increased significantly each time they have been reordered. the company uses an eoq model to determine order size. what are the implications of this price escalation with respect to order size? what factors other than price must be taken into consideration?