Identify the Accounting Concept or Principle That Gives the Most

question 144

Essay

Identify the accounting concept or principle that gives the most direction on how to account for each of the following situations.
A. It's been a particularly slow month, and the company will have a net loss for the first quarter. Management is considering not following its practice of reporting quarterly earnings to the public.
B. Salaries of the factory workers for November will not be paid until December.
C. A telephone bill is received on the last day of the month and will be paid next year.
D. A contractor is building a new development and received an advance for work to be completed over the next 2 years.
E. An accountant prepares tax returns for clients and bills them after the work is completed. It usually takes 30 days to receive payment from customers.

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Definitions:

Exponentiation

A mathematical action that consists of elevating a number to the exponent of another number.

Addition

Addition is the mathematical process of combining two or more quantities to find their total or sum.

Division

The arithmetic operation of dividing one quantity by another, resulting in a quotient and sometimes a remainder.

Multiplication

An arithmetic process that involves multiplying two numbers to achieve their resultant multiplication.