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Identify the accounting assumption, principles or concept for each

Can someone please help me state the accounting assumption, principle, information characteristic, or constraint that is most applicable in the following cases.
1. All payments less than $25 are expensed as incurred. (Do not use conservatism.)

2. The company employs the same inventory valuation method from period to period.

3. A patent is capitalized and amortized over the periods benefited.

4. Assuming that dollars today will buy as much as ten years ago.

5. Rent paid in advance is recorded as prepaid rent.

6. Financial statements are prepared each year.

7. All significant post-balance sheet events are reported.

8. Personal transactions of the proprietor are distinguished from business transactions.

Solution Preview

1. All payments less than $25 are expensed as incurred. (Do not use conservatism.)

This is a case of "materiality." That is, the items are small and so worrying about whether they are used up yet, such as with small tools, office supplies and such, is not worth the time involved to capitalize and then later count to see what should be expensed. Too small.

2. The company employs the same inventory valuation method from period to period.

This is "consistency." That is, using the same method to account ...

Solution Summary

One or two sentences explain each assumption or concept for financial statements.

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