Question
4. Match accounting assumption with most appropriate statement. A. Business Entity F. Consistency B. Materiality G. Transaction Approach C. Time Period H. Revenue Recognition D.
4. Match accounting assumption with most appropriate statement.
A. | Business Entity | F. Consistency |
B. | Materiality | G. Transaction Approach |
C. | Time Period | H. Revenue Recognition |
D. E. | Expense Recognition Historical Cost | I. Going Concern J. Full Disclosure |
Insert the applicable letter below
| i. | All significant relevant information is reported.
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| ii. | Land and buildings are purchased for $885,000. The current value of the land is $1,000,000. Which concept is applied to record the correct amount?
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| iii. | Financial statements are prepared to report quarterly and annual earnings.
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| iv. | Target Corp routinely sends emails announcing sales for preferred customers and does not record a sale until a customer makes a purchase.
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| v. | Online retailer Amazon, Inc. is financially sound and will continue in business indefinitely.
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| vi. | Costs incurred to provide a service or produce a product must be reported in the same period the revenue is recognized.
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| vii. | Money Magazine: subscription fees collected in advance are recorded as unearned subscription income and later recognized when earned. |
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| viii. | The company uses the same accounting principle from period to period.
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_____5. The following data relate to Leslie Company for the year ended December 31, 2018. The company uses the accrual basis. (Show work for partial credit)
Sales on credit | $444,000 |
Cost of inventory sold on credit | 252,000 |
Collections from customers | 352,000 |
Purchase of inventory on credit | 190,000 |
Payment for purchases | 225,000 |
Selling expenses (accrual basis) | 62,000 |
Payment for selling expenses | 45,000 |
i. Compute net income using accrual basisand select response below:
- $82,000
- $257,000
- $22,000
- $130,000
- Compute net income using cash basisand insert here: _____________
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