Accounting Coach (3/8/2024)

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

• Cost

• Economic Entity

• Monetary Unit

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?

• Cost

• Economic Entity

• Monetary Unit

Under which inventory cost flow assumption is the cost of the most recent purchase matched first with sales revenues?

• FIFO

• LIFO

• Average

Under which inventory cost flow assumption is the cost of the most recent purchases likely to remain in inventory?

• FIFO

• LIFO

• Average

Which principle/guideline justifies a company violating an accounting principle because the amounts are immaterial?

• Conservatism

• Full Disclosure

• Materiality

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?

• Matching

• Costsdf

Adjusting entries help to achieve the ____________ principle.

Full __________ is achieved through the notes to the financial statements.

Inventory is often reported at the _______ of cost or net realizable value.

The annual cost of goods sold divided by the average inventory balances is the inventory ______________ ratio.