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Unformatted text preview: h. All significant post-balance sheet events are reported. FULL DISCOSURE PRINCIPLE i. Revenue is recorded at point of sale. REVENUE RECOGNITION PRINCIPLE j. All important aspects of bond indentures are presented in financial statements. FULL DISCLOSURE PRINCPLE k. Rationale for accrual accounting. MATCHING PRINCIPLE l. The use of consolidated statements is justified. ECONOMIC ENTITY ASSUMPTION m. Reporting must be done at defined time intervals. PERIODICITY ASSUMPTION n. An allowance for doubtful accounts is established. MATCHING PRINCIPLE o. All payments out of petty cash are charged to Miscellaneous Expense. (Do not use conservatism) MATERIALITY p. Goodwill is recorded only at time of purchase. HISTORICAL COST PRINCIPLE Jesica Islas Intermediate Accounting 1 January 22, 2007 Professor A. Wu Chapter 2 q. No profits are anticipated and all possible losses are recognized. CONSERVATISM r. A company charges its sales commission costs to expense. MATCHING PRINCIPLE...
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- Spring '10
- Accounting, Generally Accepted Accounting Principles, Economic Entity Assumption, Jesica Islas Intermediate Accounting, Jesica Islas Intermediate, Professor A. Wu