Question 1.1. (TCO A) Listed below are several information characteristics and a

Question

Question 1.1. (TCO A) Listed below are several information characteristics and accounting principles and assumptions. Each of these items is assigned a number. Match the number of each with the appropriate phrase that states its application. Note: Each answer may be used multiple times.

Potential Matches: 1 : Historical cost principle

2 : Conservatism

3 : Materiality

4 : Industry practices or fair value principle

5 : Full disclosure principle

6 : Revenue recognition principle

Answer : Fair value changes are not recognized in the accounting records :

Lower of cost or market is used to value inventories :

Repair tools are expensed when purchased :

Agricultural companies use fair value for purposes of valuing crops :

All significant post balance sheet events are reported :

Revenue is recorded at point of sale

Explanation / Answer

Fair value changes are not recognized in the accounting records : 1 : Historical cost principle Lower of cost or market is used to value inventories : 2 : Conservatism Repair tools are expensed when purchased : 3 : Materiality Agricultural companies use fair value for purposes of valuing crops : 4 : Industry practices or fair value principle All significant post balance sheet events are reported : 5 : Full disclosure principle Revenue is recorded at point of sale 6 : Revenue recognition principle

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