Chapter 1, Problem 1.7E

Rules-versus Principles-Based Accounting. Review the following statements and indicate if the statement is referring to a principles-based or a rules-based accounting standard.

Statement. An accountant will use a particular accounting standard only if ...	Principles-Based or Rules-Based Accounting Standard
a. ... the length of a contract covers substantially all of the useful life of a plant asset.	a. ____________________
b. ... the number of new common shares a firm issues is equal to 20% of the previously outstanding shares.	b. ____________________
c. ... a corporation owns over 50% of the voting shares of an affiliate company.	c. ____________________
d ... a corporation has the ability to control the operating and financing activities of an affiliate company.	d. ____________________
e. ... it is more likely than not that a company’s tax position will be sustained upon examination by the Internal Revenue Service.	e. ____________________
f. . .. the sum of the undiscounted future cash flows from the use of a plant asset is less than its carrying value.	f. ____________________