Rubric grading
Graded like a finance lead would
AI answers to finance and accounting questions, scored 1–5 on each criterion. A factually wrong core claim caps the overall score at 2, however well it is written. Every grade explains itself.
- 8 graded answers
- 4 with a wrong core claim
- 3 criteria + overall
- US GAAP / ASC 606
A three-year prepaid software license
grade-08
Prompt
A company pays $36,000 upfront for a three-year software license. How should it account for this?
Response to grade
Expense the full $36,000 in the year of payment, because the cash has been spent.
Expert grade
- Accuracy
- 1/5
- Completeness
- 2/5
- Clarity
- 4/5
- Overall
- 1/5
Wrong: record a prepaid asset (or an intangible, depending on the arrangement) of $36,000 and expense it over the three years, about $1,000 per month. Matching the expense to the periods that benefit is the point of accrual accounting.
- Accuracy — Facts, numbers and accounting treatment are correct.
- Completeness — Answers every part of the question.
- Clarity — Easy to follow, no filler.