5.On October 1, 2010, $20,000 of annual magazine subscriptions were sold by Boating Monthly. The subscribed magazines are delivered on the first day of each month beginning on October 1, 2010. The...

5.On October 1, 2010, $20,000 of annual magazine subscriptions were sold by Boating Monthly. The subscribed magazines are delivered on the first day of each month beginning on October 1, 2010. The total cost of the subscribed magazines is $6,000 or $500 per monthly delivery. Using the four criteria necessary for revenue recognition, present an argument for not recognizing $10,000 of revenue during 2010.

6.When is present value be used on the financial statements? Give an example in your explanation.

7.Explain the concept of face value.

8.Why are market values not used for property, plant, and equipment on the balance sheet?

9.Why is inflation ignored in accounting?