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Match Each of the Following Transactions and Events to the Accounting

Question 256

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 months’ 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 months’ 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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