4. Match accounting assumption with most appropriate statement.

A.

Materiality

F. Consistency

B.

Going Concern

G. Revenue Recognition

C.

Full Disclosure

H. Expense Recognition

D.

E.

Business Entity

Time Period

I. Transaction Approach

J. Historical Cost

Insert the applicable letter below

i.

Online retailer Amazon, Inc. is financially sound and will continue in business indefinitely.

ii.

Financial statements are prepared periodically.

iii.

The company uses the same accounting principle

from period to period.

iv.

Shoe retailer DSW routinely sends emails announcing sales for preferred customers and does not record a sale until a customer makes a purchase.

v.

Land is purchased for $532,000. Current value of the land is $650,000. Which concept is applied to record the correct amount?

vi.

Chicago Tribune: subscription fees collected in advance are recorded as unearned subscription income and later recognized when earned.

vii.

All significant relevant information is reported.

viii.

Costs incurred to provide a service or produce a

product must be reported in the same period the revenue is recognized.

_____5.Assume you received services yesterday from your physician, Dr. Ima Pain.You will not you pay the $100 bill for services until next month. The accrual basis method of accounting is used by the Pain Medical Clinic; therefore, wages paid by the Pain Medical Clinic to staff are recorded and reported when incurred.

Wages are considered incurred when the:

a. Workers spend their paychecks

b. Workers render services, regardless of when the patient pays for services

c. Patient pays the bill

d. Workers show up at the clinic to work