Which of the following situations violates the matching principle during 2013 for a real estate company that pays its agents on commission?
A) Sales commissions are charged to expense in 2013 on all sales made in 2013 even though some of the commissions have not been paid.
B) Insurance expense is recognized for the total cost of a 1-year policy purchased in July 2013.
C) Wages expense is recognized in 2013 even though payday is not until sometime in 2014.
D) Sales commissions paid in 2013 for 2014 commissions are recorded as prepaid expenses for 2013.
Correct Answer:
Verified
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