Short Essay Questions 1.Large public accounting firms employ graduates from state-supported universities, many of who are graduates with accounting degrees. These firms' reliance on and use of the...

Short Essay Questions

1.Large public accounting firms employ graduates from state-supported universities, many of who are graduates with accounting degrees. These firms' reliance on and use of the product of subsidized educational institutions seem to imply that these colleges and universities are important assets. However, they are not recognized as assets on the balance sheets of these public accounting firms. Which one of the four basic assumptions might be used to justify the exclusion of educational assets from the balance sheets of the public accounting firms?

2.What is the fiscal period assumption and why is it used?

3.Explain the ‘markets’ in which a business entity operates.

4.Why is materiality a major problem in accounting?