A Quick Quiz: Flower Shows

Wildflower Identification
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T hen, in , an entrepreneurial soul called Adrian Boyd decided there was an opening for a summer show. Sponsored by Network Rail, who happily deposited visitors at Hampton Court Station — a short walk to the palace — the show was a huge success, and when Network Rail pulled out a couple of years later, the event was taken over by the RHS.

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This year the show celebrates its 25th anniversary, and for keen gardeners, both Chelsea May and Hampton Court June July 5 are firm fixtures in the horticultural calendar. You will find gardeners who are passionate about both, but generally speaking, when puschkinia comes to shoo-fly plant, they will come down in favour of one or other.

Chelsea has the advantage of being long established, and also of having earned its place on the social calendar — that list of society events including Royal Ascot and Wimbledon that one simply must be seen at.

Does one go to Ascot to watch the racing? Er, no. One goes to dress up; to be watched and to meet people one wants to impress. Well, not exclusively. There are, I admit, a few hundred who go to Ascot to watch the racing. And there are thousands who go to Chelsea to look at plants, to order them for delivery after the show.

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Hedges I understand; hedge funds I do not. The time period assumption also known as periodicity is the assumption that the ongoing business activity can be segregated into time periods of a year, a month, a week, etc. Full disclosure is associated with adequately reporting information that is relevant to the readers of the financial statements.

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This is often carried out in the notes footnotes to the financial statements. As long as the digits omitted are small in relation to the true amounts, companies will round numbers so as to emphasize the relevant digits. The rationale is that no one will be misled by the omission of the insignificant digits. In the U. Conservatism Right! Materiality Wrong. Materiality involves insignificant amounts.

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For example, many companies report their financial statements in thousands of dollars. The reason is that pennies, dollars, and hundreds of dollars are not significant to the decision makers using the financial statements. The cost principle requires the accountant to show assets and expenses at cost rather than at higher amounts.

Matching Right! Conservatism is used in order to 'break a tie'. Accountants should strive to be objective and to use conservatism when doubt exists between two options. Cost involves recording transactions at their cash value at the time of the transaction. Materiality involves insignificant amounts and the accounting for those amounts. Industry Practices Right! Certain industries usually those that are regulated by the government have unique reporting requirements that are followed on the financial statements as well as the reports to the government.

Matching Wrong. Conservatism requires that when two acceptable accounting options are available, the accountant should choose the option that results in less assets, less profit, or a greater liability amount in order to 'break the tie' between the options. Full disclosure involves communicating information so that the readers of the financial statements can make informed decisions.

Revenue Recognition Right!

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The revenue recognition principle requires that revenue be reported when revenue is earned when goods are sold or services are provided and not at the time when payment is received. The matching principle requires that expenses be matched to the related revenues or to the accounting period when the expenses are incurred.

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When the expenses are paid for is not relevant. The cost principle requires that assets and other transactions be recorded at cost. The chief executive was not purchased at a cost and therefore is not reported as an asset on the corporation's balance sheet.

The monetary unit assumption is also another reason why the executive is not recorded—we do not know how to measure the executive in U. Going Concerns Wrong. Going concern is an assumption that the company will continue on long enough to carry out its objectives and commitments. Cost involves recording transactions at their cost or cash value at the time of the transaction. Going Concern Wrong.

The revenue recognition principle requires that revenues be recognized when they are earned, not when the cash is received. The cost principle requires that assets be recorded at their cost at the time they are acquired.

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The cost principle prohibits increasing the cost of items in inventory before an item is sold. The matching principle requires that expenses be matched with the related revenues or to the appropriate period of time. In this case the company is incurring interest expense every minute that it has the loan.

Revenue Recognition Wrong. Mark the Practice Quiz as Complete. PRO Testimonial.