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:

Requests For Information

Formal inquiries made to gather detailed data or facts on a specific subject or project.

Inductive Outline

An organizational structure that begins with specific details and leads to a general conclusion or statement.

Deductive Sequence

A logical process where conclusions are based on the concordance of multiple premises that are generally assumed to be true.

Inductive Sequence

A logical process where specific observations or examples are used to make general conclusions.