J. Smith was preparing the December 31 year-end financial statements forher company, Smith’s Used Vehicles. On December 25, the company sold a car thatit had not yet paid for. J. Smith did not record the cost of the car as anexpense in the year-end income statement because she did not think it wasappropriate to expense something that had not yet been paid for. Which of thefollowing fundamental concepts of accounting has failed to follow? ( )