Question: QUESTION 2 (20 POINTS) In class, we learned about the Realization Principle (which is related to the Matching Principle and the Accrual Basis for Accounting),
QUESTION 2 (20 POINTS) In class, we learned about the Realization Principle (which is related to the Matching Principle and the Accrual Basis for Accounting), which basically determines when a business should recognize revenue and expenses. Listed below are four different situations involving revenue and/or expenses for a given business. Each statement is followed by two choices as to the accounting period for date) when the business might recognize this revenue or expense. INSTRUCTIONS: Select the appropriate accounting alternative by applying the realization and matching principle, and EXPLAIN YOUR REASONING a. Agritourism Ticket Sales: Because of the recent pandemic, agritourism farms are now selling reserved admission tickets well before the scheduled date of the farm visit. i. Option 1: Date when ticket is sold; ii. Option 2: Date when persons visit farm b. Tractor Sales: In order to increase sales, Tractor Supply in Morgantown WV is offering a promotion for its tractors featuring "No payments until January 2022." i. Date when tractor is sold; il. Date that payment is received from customer)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
