Question

Identify which accounting principle or assumption best describes each of the following practices: 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. If $51,000 cash is paid to buy land, the land is reported on the buyer's balance sheet at $51,000. 3. Mike Derr owns both Sailing Passions and Dockside Digs. In preparing financial statements for Dockside Digs, Mike makes sure that the expense transactions of Sailing Passions are kept separate from Dockside Digs's transactions and financial statements. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required od 3 ces 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. Identity which accounting principle or assumption best describes the above practica Required 2 >

Answer 1

Revenue recognition principle

Revenue recognition principle is an accepted principle in the field of accounting that assists with distinguishing specific circumstances wherein income is perceived and additionally decide how the income can be accounted. Regularly, you possibly perceive an income when the event has occurred, which implies that it is perceived when the amount spent can be estimated to the organization.