Each of the following statements is an application of the revenue recognition principle, the matching principle, or
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Question:
Each of the following statements is an application of the revenue recognition principle, the matching principle, or the cost principle.
1. A company records Equipment for the purchase price of $10,000 although the “suggested retail price” was $13,000.
2. A company receives $2,000 for a service to be performed but records only $1,000 as Service Revenue because it earned only half in the current period.
3. A company pays $6,000 for insurance but uses only $4,000 during the period. Therefore, it records only $4,000 as Insurance Expense.
Related Book For
Introduction to Operations Research
ISBN: 978-1259162985
10th edition
Authors: Frederick S. Hillier, Gerald J. Lieberman
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