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Match Each of the Following Transactions and Events to the Accounting

Question 277

Matching

Match each of the following transactions and events to the accounting principle applicable to recording and reporting them.

Premises:
An insurance company receives insurance premiums for six future month's worth of coverage
Helen Cho, a sole proprietor, pays for her daughter's preschool out of business funds
Mayan Imports receives a shipment from Mexico, which contains an invoice that is stated in pesos
A building is for sale at $480,000. An appraisal is given for $450,000
To make the balance sheet look better, Helen Cho added several thousand dollars to the Equipment account that she believed was undervalued
Responses:
Revenue recognition principle
Cost principle
Business entity principle
Monetary unit principle
Objectivity principle

Correct Answer:

An insurance company receives insurance premiums for six future month's worth of coverage
Helen Cho, a sole proprietor, pays for her daughter's preschool out of business funds
Mayan Imports receives a shipment from Mexico, which contains an invoice that is stated in pesos
A building is for sale at $480,000. An appraisal is given for $450,000
To make the balance sheet look better, Helen Cho added several thousand dollars to the Equipment account that she believed was undervalued
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