Question

Listed below are several statements that relate to financial accounting and reporting. Identify the accounting concept that applies to each statement. SiriusXM Radio Inc. files its annual and quarterly financial statements with the SEC. The president of Applebee’s International, Inc., travels on the corporate jet for business purposes only and does not use the jet for personal use. Jackson Manufacturing does not recognize revenue for unshipped merchandise even though the merchandise has been manufactured according to customer specifications. Lady Jane Cosmetics depreciates the cost of equipment over their useful lives.

Answer 1

Answer:

The accounting concept that applies to the given statements is as follow:

1. SiriusXM Radio Inc. files its annual and quarterly financial statements with the SEC.  ⇒ The Periodicity Assumption.

2. The president of Applebee’s International, Inc., travels on the corporate jet for business purposes only and does not use the jet for personal use.   ⇒ The Economic Entity Assumption.

3. Jackson Manufacturing does not recognize revenue for unshipped merchandise even though the merchandise has been manufactured according to customer specifications.  ⇒ Revenue Recognition

4. Lady Jane Cosmetics depreciates the cost of equipment over their useful lives.  ⇒  Expense Recognition