Correctly state the letter or letters of the principle(s), assumption(s), or concept(s) used to just

 

Correctly state the letter or letters of the principle(s), assumption(s), or concept(s) used to justify the accounting procedure followed. These procedures are all correct.

 

 

 

Principle(s), assumption(s), concept(s):

 

 

 

A. Business entity.
B. Conservatism.
C. Earning principle of revenue recognition.
D. Going concern (continuity).
E. Exchange-price (cost) principle.
F. Matching principle.
G. Period cost (or principle of immediate recognition of expense).
H. Realization principle.
I. Stable dollar assumption.

 

 

 

Accounting procedures:

 

 

 

Correctly state the letter or letters of the principle(s), assumption(s), or concept(s) used to justify the accounting procedure followed for the accounting procedures.

 

 

 

1. Inventory is recorded at the lower of cost or market value.
2. A truck purchased in January was reported at 80 percent of its cost even though its market value at year-end was only 70 percent of its cost.
3. The collection of $40,000 of cash for services to be performed next year was reported as a current liability.
4. The president's salary was treated as an expense of the year even though he spent most of his time planning the next two years' activities.
5. No entry was made to record the company's receipt of an offer of $800,000 for land carried in its accounts at $435,000.
6. A supply of printed stationery, checks, and invoices with a cost of $8,500 was treated as a current asset at year-end even though it had no value to others.
7. A tract of land acquired for $180,000 was recorded at that price even though it was appraised at $230,000, and the company would have been willing to pay that amount.
8. The company paid and charged to expense the $4,200 paid to Craig Nelson for rent of a truck owned by him. Craig Nelson is the sole stockholder of the company.

 

• Posted: 4 years ago
• Due: 06/11/2015
• Budget: $5