Question

In: Accounting

Public utilities' balance sheets list the plant assets before the current assets. This is acceptable under...

Public utilities' balance sheets list the plant assets before the current assets. This is acceptable under which accounting principle/guideline?

Select one:

a. Conservatism

b. Industry Practices

c. Cost

A large company purchases a $250 digital camera and expenses it immediately instead of recording it as an asset and depreciating it over its useful life. This practice may be acceptable because of which principle/guideline?

Select one:

a. Materiality

b. Cost

c. Matching

A corporation pays its annual property tax bill of approximately $12,000 in one payment each December 28. During the year, the corporation's monthly income statements report Property Tax Expense of $1,000. This is an example of which accounting principle/guideline?

Select one:

a. Monetary Unit

b. Matching

c. Conservatism

A company sold merchandise of $8,000 to a customer in December. The company's sales terms require the customer to pay the company in 30 days. The company's income statement reported the sale in December. This is proper under which accounting principle/guideline?

Select one:

a. Revenue Recognition

b. Monetary Unit

c. Full Disclosure

Accrual accounting is based on this principle/guideline.

Select one:

a. Matching

b. Full Disclosure

c. Cost

Solutions

Expert Solution

1. Industry Practices.

Certain Industries have to follow different reporting requirement in the financial statement which are to reported to the Government. These are generally followed by industry who are regulated by the Government so preparation of the financial statements as to be according to them.

2. Materiality

Amount of $250 is considered small amount as its a Large amount , so it becomes insignificant amount to be reported as assets .

3. Matching.

The Corporation has paid 12,000 for full year , As per the matching principle full amount need to be spread over the 12 Months.

4.Revenue Recognition

Revenue has to be recognized when its earned, since it is sold in december so will be recognized in the same amount.

5.Matching.

Expenses has to be matched with the Revenue

ekkarill92 answered 2 years ago
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