Best Buy Co. follows the accrual basis of accounting. Which of the following statements is false? Best Buy Co. reports expenses in the same accounting period as the revenues to which the expenses relate. Best Buy Co. reports revenues and expenses in the accounting period in which it receives cash or pays cash. O The accrual basis of accounting follows the matching principle. O Best Buy Co. reports revenues on the income statement in the accounting period in which it carns the revenues.

Best Buy Co. follows the accrual basis of accounting. Which of the following statements is false? Best Buy Co. reports expenses in the same accounting period as the revenues to which the expenses relate. Best Buy Co. reports revenues and expenses in the accounting period in which it receives cash or pays cash. O The accrual basis of accounting follows the matching principle. O Best Buy Co. reports revenues on the income statement in the accounting period in which it carns the revenues.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter4: The Adjustment Process

Section: Chapter Questions

Problem 3MC: Revenues and expenses must be recorded in the accounting period in which they were earned or...

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Which of the following is not a criterion to recognize revenue under GAAP? A. The earnings process must be completed. B. A product or service must be provided. C. Cash must be collected. D. GAAP requires that the accrual basis accounting principle be used in the revenue recognition process.
Which of the following statements is true? Under cash-basis accounting, revenues are recorded when a company satisfies its performance obligations and expenses are recorded when incurred. Accrual-basis accounting records both cash and noncash transactions when they occur. Generally accepted accounting principles require companies to use cash-basis accounting. The key elements of accrual-basis accounting are the revenue recognition principle, the expense recognition principle, and the historical cost principle.
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Which of the following accounts would not be reported under revenue on a simple income statement? A. interest revenue B. net sales C. rent revenue D. operating expenses
Which of the following is the principle that a company must recognize revenue in the period in which it is earned; it is not considered earned until a product or service has been provided? A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principle
How many of the following statements regarding the Revenue Recognition and Matching Principles are true? According to the Revenue Recognition Principle, a company should not record the revenue from a transaction until it is actually received in cash. If payment is received at the time a service is provided there is no difference between how cash and accrual accounting record the transaction. The Matching Principle requires that expenses be matched to the period in which they help to produce revenue. Group of answer choices A. None B. One C. Two D. Three
Which of the following is correct? Events that change a company's financial statements are recognized only when cash is paid or received The matching principle states that expenses are matched, when incurred, with the related revenue. The purpose of the income statement is to show the net financial position of a company at a particular moment of time. Revenues should be recognized only when they are realized
Which sentence is incorrect? Select one: a. Cash-basis accounting is not in accordance with generally accepted accounting principles. b. In the Accrual-Basis Accounting, expenses are recognized when incurred. c. In the Cash-Basis Accounting, Revenues recognized when cash is received. d. According to the GAAP in Accrual-Basis Accounting, companies recognize revenues when they record cash receipts for their services.
Under the accrual method of accounting, revenue is recognized at the time that cash is collected from a customer for services to be provided in the future. True False
True or False: Under the accrual accounting method, revenue is recognized when cash is received, regardless of when the goods or services are delivered.
Which of the following statements reflects an accurate comparison of cash-basis versus accrual-basis accounting? The difference between cash-basis and accrual-basis accounting is a matter of timing. The matching principle applies, regardless of whether cash-basis or accrual-basis accounting is used. IFRS and ASPE both allow for use of either cash-basis or accrual-basis accounting. Net income will be the same regardless of whether cash-basis or accrual-basis accounting is used.
What is false about the matching principle? a. Incurred expenses should be matched with earned revenues. b. It supports accrual accounting principles. Matches assets with liabilities d. It is in accordance with the Internatidwal Financial Reporting Standards.