Q11RQ. - Horngren'S Financial And Managerial Accounting

Question

Financial statements in the United States are reported in U.S. dollars. What assumption supports this statement?

Step-by-Step Solution

Answer

Monetary Unit Assumption supports this statement.

Step 1: Explanation on monetary unit assumption

As per the monetary term assumption, items of financial statements should be reported as per the monetary unit.

Step 2: Explanation of case

In the given case, the financial statement is prepared in the United States, and dollar is used in the U.S.; hence as per the monetary unit assumption, items of the financial information should be reported in terms of dollars (monetary unit).