GAAP_LECTURE

The personal assets of the owner of a company will not appear on the company's balance sheet because of which principle/guideline?

• Expenses recognition

• economic entity

• monetary measurement

Which principle/guideline requires a company's balance sheet to report its land at the amount the company paid to acquire the land, even if the land could be sold today at a significantly higher amount?

• monetary measurement

• economic entity

• history concept

Which principle/guideline requires the company's financial statements to have footnotes containing information that is important to users of the financial statements?

• full disclosure

• accounting period

• going concern

Which principle/guideline directs a company to show all the expenses related to its revenues of a specified period even if the expenses were not paid in that period?

• history cost

• expenses recognition

• accounting period

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?

• accounting period

• expenses recognition

• revenue recognition

A company borrowed $100,000 in December and will make its only payment for interest when the note comes due six months later. The total interest for the six months will be $3,600. On the December income statement the accountant reported Interest Expense of $600. This action was the result of which accounting principle/guideline?

• expenses recognition

• full disclosure

• going concern

Near the end of the current year, a company required a customer to pay $200,000 as a deposit for work that is to begin in the following year. At the end of the current year the company reported the $200,000 as a liability on its balance sheet. Which accounting principle/guideline prevented the company from reporting the $200,000 on its income statement for the current year?

• accounting period

• revenue recognition

• monetary measurement

An asset with a cost of $120,000 is depreciated over its useful life of 10 years rather than expensing the entire amount when it is purchased. This complies with which principle/guideline?

• expenses recognition

• consistency

• materiality

Which principle/guideline is associated with the assumption that the company will continue on long enough to carry out its objectives and commitments?

• accounting period

• going concern

• consistency

Switching method to value inventory from FIFO to Weighted Average every year would violate the

• full disclosure

• consistency

• going concern