All of the questions have the same choices in the drop down menu. Match each of
ID: 2332059 • Letter: A
Question
All of the questions have the same choices in the drop down menu.
Match each of the ten assumptions, principles, and exceptions below with one of the ten excerpts. Some items may be used more than once or not at all 1. The company's reporting period ends on the Saturday closest to January 31 (The Limited) 2. The consolidated financial statements include the accounts of Federal Express and its wholly owned subsidiaries (Federal Express) 3. Inventories are valued primarily at the lower of cost or market value (JCPenney) 4. Certain reclasslfications have been made for prior years to conform with this year's presentation (Wendy's International) 5.Revenues from the distribution of motion pictures are recognized when motion pictures are exhibited (Walt Disney) 6. In an ongoing investigation, the Antitrust Division of the U.S. Department of Justice requested information from Microsoft concerning various issues Conservatism Consistency Economic entity Fiscal period Going concern Matching Materiality Objectivity Revenue recognition Stable dollar Management currently believes that resolving these matters will not have a materially adverse impact on the company's financial position or operations (Microsoft) Flight equipment is depreciated on a straight-line basis over a 20-year useful life (Delta Air Lines) 7. 8. 9. 10. Intangible assets are carried on the balance sheet at cost (Merck) Property and equipment are recorded at cost (Apple Inc.) Inflation rates, even though moderate in many parts of the world, continue to have an effect on worldwide economies but have had no effect on the company's reported financial position and performance (Johnson & Johnson) Click if you would like to Show Work for this question: Qpen Show WorkExplanation / Answer
1. Fiscal Period. FIscal Period are the periods which are used by Public companies for accounting purposes
2. Economic Entity. Economic Entity is an assumption of Generally accepted Accounting principles which requires the entity to differentiates the activities of its owners and those of other entities
3. Conservatism. As per consrvatism the company should anticipate future losses or expenses but not gains thus Inventory is valued at lower of market or cost value
4. Objectivity. Objectivity accounting concept requires the company to make past years' financial information in accordance with Current year financial presentation
5. Revenue Recognition Revenue Should be recognized when the product is delivered to buyer and it is evident that the buyer is going to pay back for the goods.
6. Materiality. Materiality deals with the omissions or misstatements in the financial statements on the investor.
7. Consistency. Consistency concept wants the company's to follow an accounting procedure over a period of time rather than changing it from time to time.
8. Going Concern. Going Concern Concept requires the company to prepare the financial statemnets that the company will run for forseeable future.
9.Matching Concept. Matching concept requires the company to account expenses and incomes related to a period should be accountable in the related period.
10. Stable Dollar. It is mentioned that the effect of inflation rates doesn't have effect on company's reported financial statements thus it is a stable dollar