Which of the following situations violates the matching principle? Some of the amount that was paid for a one-year insurance policy partway through Year 1 is recorded as insurance expense in Year 2. A one-year insurance policy is purchased partway through the year; full payment is recorded as insurance expense when the payment is made. Wages expense is recorded in Year 1 even though payday is not until sometime in Year 2. Sales commissions on all sales made in Year 1 are recorded as an expense in Year 1 even though some of the commissions have not yet been paid.
Which of the following situations violates the matching principle? Some of the amount that was paid for a one-year insurance policy partway through Year 1 is recorded as insurance expense in Year 2. A one-year insurance policy is purchased partway through the year; full payment is recorded as insurance expense when the payment is made. Wages expense is recorded in Year 1 even though payday is not until sometime in Year 2. Sales commissions on all sales made in Year 1 are recorded as an expense in Year 1 even though some of the commissions have not yet been paid.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Which of the following situations violates the matching principle?
Some of the amount that was paid for a one-year insurance policy partway through Year 1 is recorded as insurance expense in Year 2.
A one-year insurance policy is purchased partway through the year; full payment is recorded as insurance expense when the payment is made.
Wages expense is recorded in Year 1 even though payday is not until sometime in Year 2.
Sales commissions on all sales made in Year 1 are recorded as an expense in Year 1 even though some of the commissions have not yet been paid.
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