User Account

All Pages

Matching principle

Assignment Help Accounting Basics
Reference no: EM131103527

1. (Matching Principle) Accountants try to prepare income statements that are as accurate as possible. A basic requirement in preparing accurate income statements is to match costs against revenues properly. Proper matching of costs against revenues requires that costs resulting from typical business operations be recognized in the period in which they expired. 

(a) List three criteria that can be used to determine whether such costs should appear as charges in the income statement for the current period.

(b) As generally presented in financial statements, the following items or procedures have been criticized as improperly matching costs with revenues. Briefly discuss each item from the viewpoint of matching costs with revenues and suggest corrective or alternative means of presenting the financial information.

(1) Receiving and handling costs.

(2) Valuation of inventories at the lower of cost or market.

(3) Cash discounts on purchases. 

Reference no: EM131103527

Questions Cloud

Would it be preferable to amortize the cost of display house : Would it be preferable to amortize the cost of display houses on the basis of (1) the passage of time or (2) the number of shell houses sold? Explain.(AICPA adapted)
Bank financing is needed to eliminate the past-due accounts : The company's balance sheet is as follows (thousands of dollars): a. How much bank financing is needed to eliminate the past-due accounts payable? b. Would you as a bank loan officer make the loan? Why or why not?
What is the effective, or equivalent, annual cost : Thompson purchases under terms of 2/10, net 30, but it can delay payment for an additional 35 days-paying in 65 days and thus becoming 35 days past due-without a penalty because of its suppliers' current excess capacity problems. What is the effectiv..
What is the average amount of accounts payable : Suppose a firm makes purchases of $3.65 million per year under terms of 2/10, net 30, and takes discounts.a. What is the average amount of accounts payable net of discounts? (Assume that the $3.65 million of purchases is net of discounts-that is, gro..
Matching principle : List three criteria that can be used to determine whether such costs should appear as charges in the income statement for the current period.
Explain the rationale for recognizing costs as expenses : In what general circumstances would it be appropriate to treat a cost as an asset instead of as an expense? Explain.
Discuss the factors to be considered in determining : Discuss the factors to be considered in determining when revenue should be recognized for the purpose of accounting measurement of periodic income.
The publication of the magazine every month : Both events, by recognizing a portion of the revenue with cash sale of the magazine subscription and a portion of the revenue with the publication of the magazine every month.
Prepare a cash budget for december, january, and february : The estimated sales and purchases for December, January, and February are shown below. Purchases during November amounted to $140,000.a. Prepare a cash budget for December, January, and February.b. Now, suppose Koehl were to start selling on a credit..

Reviews

Write a Review

Accounting Basics Questions & Answers

  On january 1 2010 jacob issues 800000 of 9 13-year bonds at

on january 1 2010 jacob issues 800000 of 9 13-year bonds at a price of 96 12. six years later on january 1 2016 jacob

  Tern corporation a cash basis taxpayer has taxable income

tern corporation a cash basis taxpayer has taxable income of 500000 for the current year. tern elected 100000 of sect

  A trial balance to show the balancing of accounts there are

journalize the following december 2011 transactions in quickbooksdecember 1 issued to larry and samantha west 10000

  Capital balances as of the end of the current year

Capital balances as of the end of the current year:

  The lifo inventory method has been used the fifo inventory

valman company is considering purchasing ekc company. ekcs balance sheet at december 31 2013 is as

  Why are reversing entries optional?

Why are reversing entries optional?

  Net present value of the proposed project

The company requires a minimum pretax return of 12% on all investment projects. The net present value of the proposed project is closest to:

  Valentine corporation has a noncontributory defined benefit

valentine corporation has a noncontributory defined benefit pension plan. data for 2004 were as follows pension plan

  Accompanying the bank statement was a credit memo for the

accompanying the bank statement was a credit memo for a short-term note collected by the bank for the customer. what

  Lila battle has determined that the annual demand for

lila battle has determined that the annual demand for number 6 screws. lila who works in her brothers hardware store is

  The acctual cash recieved from cash sales was 11279 and

the acctual cash recieved from cash sales was 11279 and the amount indicated by the cash register total was 11256 what

  What is the purpose of a bank reconciliation what are the

what is the purpose of a bank reconciliation? what are the reasons for differences between the cash reported in the

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd