Which of the Following Situations Violates the Matching Principle During

question 122

Multiple Choice

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.

Understand the concept of the Weighted Average Cost of Capital (WACC) and its components.

Calculate the cost of different types of capital (equity, preferred stock, debt).

Determine the market value of a firm using its equity, debt, and preferred stock values.

Understand and calculate the cost of equity using different models (e.g., Dividend Discount Model, CAPM).

---

Definitions:

Role-Plays

A training or learning technique where individuals act out roles in specific scenarios to practice skills, behaviors, or problem-solving in a controlled environment.

Participant

A person who takes part in something, such as an event, activity, or study.

Assessed

To be assessed means to be evaluated or measured in terms of performance, quality, or value.

Lateral Moves

A job change within an organization to a position of similar status and pay, offering professional growth without upward promotion.