Identify the accounting principle or assumption that best explains each situation. 1. In December of this year, Chavez Landscaping received a customer's order and cash prepayment to install sod at a house that would not be ready for installation until March of next year Chavez should record the revenue from the customer order in March of next year, not in December of this year. 2. Green Cleaners Incorporated purchased bleach for an upcoming job. Green Cleaners does not record the expense until It performs the cleaning job. 3. Chen Organics purchased a tractor for $20,000 cash. The owner believes the tractor is really worth $30,000. The tractor is still recorded at $20,000 on the balance sheet.

Identify the accounting principle or assumption that best explains each situation. 1. In December of this year, Chavez Landscaping received a customer's order and cash prepayment to install sod at a house that would not be ready for installation until March of next year Chavez should record the revenue from the customer order in March of next year, not in December of this year. 2. Green Cleaners Incorporated purchased bleach for an upcoming job. Green Cleaners does not record the expense until It performs the cleaning job. 3. Chen Organics purchased a tractor for $20,000 cash. The owner believes the tractor is really worth $30,000. The tractor is still recorded at $20,000 on the balance sheet.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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