FINANCIAL ACCOUNTING ASSIGNMENT HELP

Transaction Description

Accounting Principle

Justification Based on Accounting Principle

Include Transaction?

(Yes / No)

Types of Accounts

Increases or Decreases Account

Example:

Pays utility bill

Matching principle

Provide justification for applying the principle to the transaction 1

Yes

Expense

Asset

Increase

Increase

Her parents gave her $5000 (Invested)

Historical cost

The entry has been verified, and the transaction has been finalized.

No

Equity

Asset

Increase

Increase

The Computer was bought on the credit of $1,000

Accounting (Accrual)

Cash payment was not completed, but the expenditure has ensued.

Yes

Expense

Asset

Increase

Increase

The Task was finished and the payment of $5,000 was made

Revenue

recognition

Service was provided, and payment was received.

Yes

Asset

Revenue

Increase

Increase

$2,000 rent was paid

Matching principle

Under the matching principle, it is a periodic cost.

Yes

Asset

Expense

Decrease

Increase

Advance payment of $4,000 rent for upcoming two months

Historical Cost

Not qualify for matching principle though transaction is made and a part of future period.

No

Asset

Asset (prepaid lease)

Decrease

Increase

 The telephone bill was paid

Matching principle

The cost was a periodic one under the matching principle

Yes

Asset

Expense

Decrease

Increase

 Internet fee was paid

Matching principle

Under the matching principle, a periodic cost.

Yes

Asset

Expense

Decrease

Increase

Discussion of salary with the new employee ($15)

Monetary Unit Assumption

It is not a current cost but a theoretical cost.

No

Asset

Liability

Decrease

Increase

Task was completed with a total amount of $3,000

Revenue

Recognition

The service was provided, but it will be delivered after receiving the due payment.

Yes

Revenues

Increase