The IRS is conducting an investigation of the construction industry because contractors routinely classify carpenters, dry-wallers, and plumbers who work on all of their projects as independent contractors. These craftsmen report for work on different jobs, but all of the jobs are managed by the same contracting firm. Which of the following will be most important in determining whether the craftsmen are employees rather than independent contractors? a. That they work for other contractors. b. That they determine which jobs they will work on and which they will not. c. That they bring their own tools. d. That they are told to report for work on which days and at what time.

For each of the following situations, indicate whether you agree or disagree with the financial reporting practice employed and state the basic assumption, component, or accounting principle that is applied (if you agree) or violated (if you disagree).wagner corporation adjusted the valuation of all assets and liabilities to reflect changes in the purchasing power of the dollar.spooner oil company changed its method of accounting for oil and gas exploration costs from successful efforts to full cost. no mention of the change was included in the financial statements. the change had a material effect on spooner's financial statements.cypress manufacturing company purchased machinery having a five-year life. the cost of the machinery is being expensed over the life of the machinery.rudeen corporation purchased equipment for $180,000 at a liquidation sale of a competitor. because the equipment was worth $230,000, rudeen valued the equipment in its subsequent balance sheet at $230,000.davis bicycle company received a large order for the sale of 1,000 bicycles at $100 each. the customer paid davis the entire amount of $100,000 on march 15. however, davis did not record any revenue until april 17, the date the bicycles were delivered to the customer.gigantic corporation purchased two small calculators at a cost of $32.00. the cost of the calculators was expensed even though they had a three-year estimated useful life.esquire company provides financial statements to external users every three years.