(Learning Objective 2: Applying accounting concepts and principles) Identify the accounting concept or principle that gives the most direction on how to account for each of the following situations:
a. Salary expense of $20,000 is accrued at the end of the period to measure income properly.
b. October has been a particularly slow month, and the business will have a net loss for the third quarter of the year. Management is considering not following its customary practice of reporting quarterly earnings to the public.
c. A physician performs a surgical operation and bills the patient’s insurance company. It may take 3 months to collect from the insurance company. Should the physician record revenue now or wait until cash is collected?
d. A construction company is building a highway system, and construction will take 3 years. When should the company record the revenue it earns?
e. A utility bill is received on December 30 and will be paid next year. When should the company record utility expense?