Review the following statements and indicate if the statement is referring to a principles-based or a rule-based accounting standard.

Statement: "An accountant will use a

Principles-based or Rules-based

particular accounting standard only if..."

Accounting Standard

a. ...the length of a contract covers substantially all of the

a.

useful life of a plant asset.

b. ...the number of new common share a firm issues is equal

b.

to 20% of the previously outstanding shares.

c. ...a corporation owns over 50% of the voting shares of an

c.

affiliate company.

d. ...a corporation has the ability to control the operating and

d.

financial activities of an affiliate company.

e. ...it is more likely than not that a company's tax position will

e.

be sustained upon examination by the Internal Revenue Service.

f. ...the sum of the undiscounted future cash flows from the use

f.

of a plant asset is less than its carrying value.