Answered: Business transactions are economic…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter3: Accrual Accounting

Section: Chapter Questions

Problem 1MCQ: Which of the following statements is true? Under cash-basis accounting, revenues are recorded when a...

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Business transactions are economic events that involed all the above information except:

Select one:

A. Should be recorded only in statement of financial position and income statements

B. does not involve an exchange, such as losses from fire, flood, explosion, and theft; physical wear and tear on machinery and equipment, and the day-by-day accumulation of interest

C. economic events that should be recorded in the accounting records

D. transaction can be an exchange of value (a purchase, sale, payment, collection, or loan) between two or more parties

The matching principle requires the matching of revenue earned against the expenses incurred in the same period in order to generate the net income or net profit (or net loss) for the period

Select one:

A. Accrual basis

B. Separate entity

C. Prudence

D. Double-entry system

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