The approach to preparing financial statements based on recording revenues when products and services are delivered and recording expenses when incurred is: Multiple Choice • Cash basis accounting. • The expense recognition (Matching) principle. • The time period assumption. • Accrual basis accounting. • Revenue basis accounting.

The approach to preparing financial statements based on recording revenues when products and services are delivered and recording expenses when incurred is: Multiple Choice • Cash basis accounting. • The expense recognition (Matching) principle. • The time period assumption. • Accrual basis accounting. • Revenue basis accounting.

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...

See similar textbooks

Similar questions

Which of the following principles matches expenses with associated revenues in the period in which the revenues were generated? A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principle
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 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.
Consider the following accounts and determine if the account is an asset (A), a liability (L), or equity (E). A. Accounts Receivable B. Sales Revenue C. Land D. Unearned Revenue
Revenues and expenses must be recorded in the accounting period in which they were earned or incurred, no matter when cash receipts or outlays occur under which of the following accounting methods? A. accrual basis accounting B. cash basis accounting C. tax basis accounting D. revenue basis accounting
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
From the following Company Z adjusted trial balance, prepare simple financial statements, as follows: A. Income Statement B. Retained Earnings Statement C. Balance Sheet
The matching principle in accounting requires the matching of debits and credits.
Identify the financial statement on which each of the following accounts would appear: the income statement (IS), the retained earnings statement (RE), or the Balance Sheet (BS). A. Insurance Expense B. Accounts Receivable C. Office Supplies D. Sales Revenue E. Common Stock F. Notes Payable
Which of the following terms is used when assuming a business will continue to operate in the foreseeable future? A. separate entity concept B. monetary measurement concept C. going concern assumption D. time period assumption
The Accounting Equation For each of the following independent cases, fill in the blank with the appropriate dollar amount.
Explain how the accounting equation organizes financial information using T-accounts and debits and credits.