Match the statement on the Left with the appropriate response on the right. Asse
ID: 2409502 • Letter: M
Question
Match the statement on the Left with the appropriate response on the right. Assets should be recorded at[Choose ] their cost. Accrued Revenues Cost principle Full disclosure principle Circumstances and events thatDebit make a difference to financial statement users should be disclosed Total assets overstated Total assets not affected. Relevance Unearned Revenues Materiality Normal Balance Information that has a bearing on a decision Choose] An item important enough to[ Choose influence a prudent investor The left side of an account. Choose ] The increase side of an account. Interest revenue collected; notChoosel t earned.Explanation / Answer
1. Assets should be recorded at their cost - COST PRINCIPLE
2. Circumstances and events that make a difference to financial statements users should be disclosed - FULL DISCLOSURE PRINCIPLE
3. Information that has a bearing on a decision - RELEVANCE
4. An item important enough to influence a prudent investor - MATERIALITY
5. The left side of an account - DEBIT
6. The increase side of an account - NORMAL BALANCE
7. Interest revenue collected, not yet earned - UNEARNED REVENUES
8. Rent not yet collected, already earned - ACCRUED REVENUES
9. Failure to record expired prepaid rent - TOTAL ASSETS OVERSTATED
10. Failure to record accrued wages - TOTAL ASSETS NOT AFFECTED