Joe's Auto Company uses the accrual basis of accounting. Which situation violates the matching principle during 2012?
A) Sales commissions are charged to expense in 2012 on all sales revenue recognized in 2012 even though some of the commissions have not been paid.
B) Insurance expense is recognized for the total cost of a 1-year policy purchased in May, 2012.
C) Rent expenses are recognized as expenses in 2012 even though the last bill received in 2012 will not be paid until 2013.
D) Sales commissions paid in 2012 for 2013 commissions are recorded as prepaid expenses for 2012.
B
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