Help Match each transaction or definition with its related concept by selecting the appropriate letter in the drop down menu. A. Recorded a $2,000 sale of merchandise on credit. B. Counted (inventoried) the unsold items at the end of the period and valued them in dollars. C. Acquired a vehicle for use in operating the business, D. Reported the amount of depreciation expense because it likely will affect statement users' decision making. E The investors, creditors, and others interested in the business. F. Used special accounting approaches because of the uniqueness of the industry, G. Sold and issued bonds payable of $3 million H. Used services from outsiders; paid cash for some and put the remainder on credit. 1. Engaged an outside independent CPA to audit the financial statements. J. Sold an asset at a loss that was a peripheral or incidental transaction K. Established an accounting policy that sales revenue shall be recognized only when ownership of the goods sold passes to the customer L. To design and prepare the financial statements to assist the users in making decisions. M. Established a policy not to include in the financial statements the personal financial affairs of the owners of the business. N. Sold merchandise and services for cash and on credit during the year, then determined the cost of those goods sold and the cost of rendering those services. O. The value to users of a special financial report exceeds the cost of preparing it P. Volued an asset, such as inventory, at less than its purchase cost because the market value is less Q. Dated the income statement "For the Year Ended December 31, 2017" R. Pald a contractor for an addition to the building with $15,000 cash and $20,000 market value of the stock of the company ($35,000 was deemed to be the cash-equivalent price) S. Acquired an asset (a pencil sharpener that will have a useful life of five years) and recorded it as an expense when purchased for $1.99 T. Disclosed in the financial statements all relevant financial information about the business, necessitated the use of notes to the financial statements, U. Sold an asset at a gain that was a peripheral or incidental transaction V. Assets of $600,000 - Liabilities of $400,000? W. Accounting and reporting assume a "going concern." Transactions/Definitions Concepts (1) Users of financial statements (2) Objective of financial statements Qualitative Characteristics (3) Relevance (4) Reliability Assumptions (5) Separate entity (6) Continuity (7) Unit of measure (8) Time period Elements of Financial Statements (9) Revenues (10) Expenses (11) Gains (12) Losses (13) Assets (14) Liabilities (15) Stockholders' equity Principles (16) Cost (17) Revenue (18) Matching (19) Full disclosure Constraints of Accounting (20) Materiality threshold (21) Cost-effectiveness (22) Conservatism (23) Special industry practices
