Question

Every winter, Bonnie’s Boutique hires 10 seasonal employees to work from November 15 through January 15. The workers are paid 25% of their total salary in November, 50% of their total salary in December, and the remaining 25% of their total salary in January. Bonnie’s Boutique recognizes all salary expenses related to these workers at the end of January. In this scenario, Bonnie’s has ___________

Answer 1

Bonnie´s has... violated a principle: the matching principle.

The matching principle requires to the firm to recognize 25% of the total salary expense in november, 50% in december and 25% in january.

Bonnie´s boutique only recognizes this expenses all together, that´s where the violation falls.