Listed below are several terms associated with recognition and measurement concepts. For each of the following items, list the letter of the term that corresponds to the most appropriate recognition and measurement concept. A) Materiality B) Conservatism C) Industry Practice D) Full Disclosure E) Revenue Recognition F) Matching Concept G) Economic Entity H) Going Concern

Note: Each category can be used once, more than once, or not at all. Ex. The records of the business should be kept separate from that of the owners. G

1. Smart-Way Corporation accrued salaries of $2,000,000 at year-end because the pay date for employees occurs in the following year.

2. Arc Corp, a publicly traded company, elected to expense the $100 purchaseof small tools instead of capitalizing this cost. The auditors had no objections.

3. Delta Construction Corporation accounted for projects using the Cost-to-Cost method. Other construction businesses also use this method.

4. Fischer Company selected to use the FIFO method of accounting for its inventory because this method is less likely to overstate the inventory.

5. Forde Corporation sold goods to a customer and allocated a portion of this sale to a warranty it provided. The warranty was properly recognized over a three year period.

6. Subsequent to the balance sheet date, Erlo Company suffered a fire in its main warehouse that caused significant damage. This was properly stated inErlos footnotes.