Matching
From the list of concepts,principles,and assumptions,choose the letter which best matches each item below.Use each term only once.
Premises:
Revenues are recorded when the goods are delivered even if the cash was not collected.
The owner's personal expenses should not be included in the company's records.
Assumes companies are going to stay in business indefinitely.
Comparing financial statements of different companies is more meaningful when the statements are prepared in accordance with GAAP.
Land is valued on the balance sheet at the amount paid for it even though it is worth more.
Supplies are expensed in the period they are used to help generate revenue.
The same methods of measuring items on the financials should be used from period to period.
Cost of goods sold is presented in dollars, not units, on the income statement.
Accounting information is provided in a timely fashion so that the information is still useful.
The items on the financial statements should be accurate and truthful.
Revenues are recorded when earned and expenses are recorded when incurred regardless of when the related cash changes hands.
Items purchased for less than $25 are expensed even though they will last longer than a year.
Responses:
Relevance
Historical-cost principle
Matching principle
Monetary-unit assumption
Separate-entity assumption
Materiality
Reliability
Going-concern assumption
Accrual accounting
Revenue-recognition principle
Comparability
Consistency
Correct Answer:
Premises:
Responses:
Revenues are recorded when the goods are delivered even if the cash was not collected.
The owner's personal expenses should not be included in the company's records.
Assumes companies are going to stay in business indefinitely.
Comparing financial statements of different companies is more meaningful when the statements are prepared in accordance with GAAP.
Land is valued on the balance sheet at the amount paid for it even though it is worth more.
Supplies are expensed in the period they are used to help generate revenue.
The same methods of measuring items on the financials should be used from period to period.
Cost of goods sold is presented in dollars, not units, on the income statement.
Accounting information is provided in a timely fashion so that the information is still useful.
The items on the financial statements should be accurate and truthful.
Revenues are recorded when earned and expenses are recorded when incurred regardless of when the related cash changes hands.
Items purchased for less than $25 are expensed even though they will last longer than a year.
Premises:
Revenues are recorded when the goods are delivered even if the cash was not collected.
The owner's personal expenses should not be included in the company's records.
Assumes companies are going to stay in business indefinitely.
Comparing financial statements of different companies is more meaningful when the statements are prepared in accordance with GAAP.
Land is valued on the balance sheet at the amount paid for it even though it is worth more.
Supplies are expensed in the period they are used to help generate revenue.
The same methods of measuring items on the financials should be used from period to period.
Cost of goods sold is presented in dollars, not units, on the income statement.
Accounting information is provided in a timely fashion so that the information is still useful.
The items on the financial statements should be accurate and truthful.
Revenues are recorded when earned and expenses are recorded when incurred regardless of when the related cash changes hands.
Items purchased for less than $25 are expensed even though they will last longer than a year.
Responses:
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