Match each accounting scenario described on the left with its corresponding governing accounting concept or convention listed on the right.
- Recognizing revenue from a sales transaction at the point legal title passes to the buyer, rather than when the purchase order is placed or cash is received.Realization Concept
- Recording a commercial building on the balance sheet at its original purchase price despite significant inflationary growth in local property values.Historical Cost Concept
- Capitalizing and reporting a long-term finance lease as an asset on the lessee's balance sheet based on commercial reality despite legal ownership remaining with the lessor.Substance Over Form
- Dividing the continuous operating lifecycle of an enterprise into uniform annual segments to determine periodic net income.Periodicity Concept
Cevap
The scenarios correctly match as follows: Revenue recognition upon legal title transfer pairs with the Realization Concept; carrying assets at original purchase price pairs with the Historical Cost Concept; presenting leased assets according to economic reality pairs with Substance Over Form; and dividing enterprise lifespan into reporting intervals pairs with the Periodicity Concept.
Each transaction scenario aligns directly with its governing accounting concept: legal title transfer for revenue corresponds to the Realization Concept; reporting assets at historical acquisition cost corresponds to the Historical Cost Concept; prioritizing economic control over legal title corresponds to Substance Over Form; and segmenting business life into reporting periods corresponds to the Periodicity Concept.
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Anahtar Kavram
Application of Accounting Concepts and Conventions