Recording the Purchase Price of a Pencil Sharpener (With an Estimated

question 71

Multiple Choice

Recording the purchase price of a pencil sharpener (with an estimated useful life of 10 years) as an expense of the current period is justified by the

• A) going-concern assumption.
• B) materiality constraint.
• C) matching principle.
• D) comparability principle.

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Definitions:

Independent Contractor

An individual who provides services to another entity under terms specified in a contract or agreement, but is not considered an employee of the entity.

Inherently Dangerous Activity

An activity that carries an inherent risk of harm or damage, even when all possible care is taken to prevent that harm.

Liability

The legal responsibility to settle a debt or fulfill an obligation, potentially involving payment for damages in legal cases.

Employer

An individual or organization that hires and pays individuals to perform services or work.