One of the Principles of the Conceptual Framework Is the Matching

question 41

Multiple Choice

One of the principles of the conceptual framework is the matching principle.Which of the following is not a good example of that principle?

• A)A machine that produces certain goods is amortized over its useful life.The resulting amortization expense is matched with the proceeds from the sale of those goods.
• B)The entire two-year insurance premium is expensed in the first year.
• C)The write-off an uncollectible receivable in the year that the sale was made.
• D)The recognition of revenue for which associated expenses can not yet be determined is delayed until such determination can be made.

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Definitions:

Flexible Budget

A budget designed to change in response to variations in volume or activity levels.

Food

A substance consumed by living organisms to provide nutritional support, primarily obtained through plants, animals, or fermentation.

Supplies

Items used in the operation of a business or manufacturing process, which are not directly associated with the products being made.

Net Operating Income

The financial metric that calculates a company's profitability from its normal business operations, deducting operating expenses from the revenue.