Question: Five common accounting practices are listed below: a. A customer pays $20 to mail a package on December 30. The delivery company recognizes revenue when
Five common accounting practices are listed below:
a. A customer pays $20 to mail a package on December 30. The delivery company recognizes revenue when the package is delivered in January.
b. Jim Trotter owns C&S Heating Company. In preparing the financial statements, Trotter makes sure that the purchase of a new truck for personal use is not included in C&S's financial statements.
c. Moseley Inc. recorded land at its purchase price of $50,000. In future periods, the land is reflected in the financial statements at $50,000.
d. Mack Company purchases inventory in March. However, it does not expense that inventory until it is sold in April.
e. Mueller Inc. prepares quarterly and annual financial statements.
Required:
Identify the accounting principle or assumption that best describes each practice.
a. A customer pays $20 to mail a package on December 30. The delivery company recognizes revenue when the package is delivered in January.
b. Jim Trotter owns C&S Heating Company. In preparing the financial statements, Trotter makes sure that the purchase of a new truck for personal use is not included in C&S's financial statements.
c. Moseley Inc. recorded land at its purchase price of $50,000. In future periods, the land is reflected in the financial statements at $50,000.
d. Mack Company purchases inventory in March. However, it does not expense that inventory until it is sold in April.
e. Mueller Inc. prepares quarterly and annual financial statements.
Required:
Identify the accounting principle or assumption that best describes each practice.
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