a liability account.O a contra asset account.O an expense account.O a stockholders' equity account.Question 3Which of the following statements concerning accrual-basis accounting is incorrect?Accrual-basis accounting is the method required by generally accepted accounting principles.Accrual-basis accounting recognizes expenses when they are paid.O Accrual-basis accounting follows the revenue recognition principle.O Accrual-basis accounting follows the expense recognition principle.Question 4Closing entriesO summarize the activity in every account.O are prepared before the financial statements.

Accrual accounting is a bookkeeping technique where income or costs are recorded when an exchange…

Question 3 Which of the following statements concerning accrual-basis accounting is incorrect? O Accrual-basis accounting is the method required by generally accepted accounting principles. O Accrual-basis accounting recognizes expenses when they are paid. O Accrual-basis accounting follows the revenue recognition principle. O Accrual-basis accounting follows the expense recognition principle.

Question 3 Which of the following statements concerning accrual-basis accounting is incorrect? O Accrual-basis accounting is the method required by generally accepted accounting principles. O Accrual-basis accounting recognizes expenses when they are paid. O Accrual-basis accounting follows the revenue recognition principle. O Accrual-basis accounting follows the expense recognition principle.

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...

See similar textbooks

Similar questions

What is the impact on the accounting equation when a payment of account payable is made? A. both sides increase B. both sides decrease C. only the Asset side changes D. neither side changes
The Effect of Transactions on the Accounting Equation For each of the following transactions, indicate whether it increases (I), decreases (D), or has no effect (NE) on the total dollar amount of each of the elements of the accounting equation.
Which of the following is the principle that a business must report any business activities that could affect what is reported on the financial statements? A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principle
Which set of accounts has the same type of normal balance? A. Cash, accounts payable B. Prepaid rent, unearned service revenue C. Dividends, common stock D. Accounts payable, retained earnings
Identify whether each of the following accounts would be considered a permanent account (yes/no) and which financial statement it would be reported on (Balance Sheet, Income Statement, or Retained Earnings Statement). A. Accumulated Depreciation B. Buildings C. Depreciation Expense D. Equipment E. Fees Earned Revenue F. Insurance Expense G. Prepaid Insurance H. Supplies Expense I. Dividends
What are the effects of the following transactions on the accounting equation? Indicate an increase (+) or decrease () under the affected asset, liability, and owners equity headings.
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.
Which of these accounts is never closed? A. Dividends B. Retained Earnings C. Service Fee Revenue D. Income Summary
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 pairs increase with credit entries? A. supplies and retained earnings B. rent expense and unearned revenue C. prepaid rent and common stock D. unearned service revenue and accounts payable
Which of the following accounts balance would be a different number on the Balance Sheet than it is on the adjusted trial balance? A. accumulated depreciation B. unearned service revenue C. retained earnings D. dividends
What is the effect on the fundamental accounting equation if supplies are purchased on account? How will the fundamental accounting equation change if supplies are purchased with cash? Explain how this purchase will or will not change the owners equity.