Question 1: Mastery: Discuss the effects of four of the five major accounting assumptions on the accounting process. The effects of the five main accounting assumptions that affect the accounting process are: 1. Business entity: Business entity assumes that the data collected in an accounting system relates to a specific business. The concept of a business entity assumes that each business is distinct from its owners, creditors, employees, interested parties and other businesses. In the context of the commercial entity, the data collected strictly concerns the company and not its owner. There are other forms of entities within corporations. For example, companies like Toyota or Ford Motors may have several different legal entities for reporting purposes, but the company may be considered a single business entity because they have common ownership.2. The going concern hypothesis believes that a business will continue to operate unless strong evidence suggests that the entity will end. Dissolution of an entity occurs when a company increases its business operations and sells its assets. The going concern assumption is no longer valid if a business appears likely to be liquidated. Accountants often cite this assumption to justify using actual cost rather than market cost to value assets.3. Monetary measurement involves measuring the company's economic activities in monetary terms like dollars instead of using physical terms like inches, grams, or feet. Using a common currency unit allows accountants to report economic activities consistently. Without monetary units, it would be impossible to add items such as buildings, equipment and inventory to the balance sheet. Financial statements are presented in monetary units to allow users to value paper...be the number one seller and generate revenues in excess of $500 million. The company also has a patent lawsuit that it estimates it will lose for $20 million. In accordance with the principles of prudence, it suggests that the company should disclose the contingent liability in the footnotes of the company's financial statements. ReferencesAverkamp, ​​​​H. (January 1, 2014). Accounting principles | Explanation | Accounting Coach. AccountingCoach.com. Retrieved May 2, 2014 from http://www.accountingcoach.com/accounting-principles/explanationHermanson, R., Edwards, J. and Maher, M. (2010).Accounting principles: a business perspective. (Vol.2). Manuel Équité inc. DOI: www.textbookequity.comSiegel Ph.D. CPA, Joël G.; Cale Ph.D., Jae K. (02/01/2010). Dictionary of Accounting Terms (Barron's Dictionary of Accounting Terms) (p. 129). Barron's Educational Series. Kindle Edition.