Under the modified accrual basis of accounting, expenditures generally are not recognized until: a. They are paid in cash. b. An obligation is incurred that will be paid from currently available financial resources. c. Goods or services are ordered. d. They are approved by the legislative body.

Under the modified accrual basis of accounting, expenditures generally are not recognized until: a. They are paid in cash. b. An obligation is incurred that will be paid from currently available financial resources. c. Goods or services are ordered. d. They are approved by the legislative body.

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

Related questions

Q: Best Buy Co. follows the accrual basis of accounting. Which of the following statements is false?…

A: Under Accrual System of accounting Revenues are recognised as and when they are earned irrespective…

Q: Under the general rule of revenue recognition, revenue is recognized when Group of answer choices…

A: The revenue recognition principle says that we need to recognize the revenue at the time when goods…

Q: Interest expense is listed on the Income Statement in 'Other revenue and Expenses'. Assess the…

A: Interest Expenses: The cost that an organization must pay to service its interest obligation is…

Q: Under accrual accounting, when should expenses be matched against revenue? after cash is collected…

A: Accrual basis: Under accrual basis accounting, revenue and expenses are recognized when they are…

Q: Which of the following is true regarding whether IFRS specifically addresses the accounting and…

A: IFRS:

Q: The revenue recognition principle and the expense recognition principle require that the company…

A: Revenue Recognition It is important for the business entity to recognize the revenue and its…

Q: (a) Explain and give an example of the effect on a set of published financial statements if the…

A: Hello. Since your question has multiple parts, we will solve first question for you. If you want…

Q: In what ways does revenue recognition differ from other financial accounting procedures?

A: Definition: Every corporate entity should record revenues when they are generated, regardless of…

Q: Companies that use IFRS: a. may report all their assets on the statement of financial position at…

A: Answer: Option c.

Q: Which of the following is true about the revenue journal? Please explain with full explanation a.…

A: Revenue means the income which is generated from the business operations in terms of selling goods…

Q: Accountants use reserve accounts for various reasons, for each of the cases below describe a…

A: Uses of reserves

Q: be viewed as a going concern C. The financial statements are reliable D. Accounting policies are…

A: Only items that fit the definitions of an asset, a liability, or equity are recognised in the…

Q: According to accruals rules, when a service is performed, the revenue should be recognized…

A: Solution- Accrual accounting is an accounting method whereby revenue and expenses are recorded in…

Q: The following questions deal with materiality. Choose the best response. Which one of the following…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: What is meant by the term unearned revenue? Where should an unearned revenue account appear in the…

A: Revenue: It refers to the amount earned by a business from selling its goods or services to the…

Q: State the three main financial statements that public companies must complete. Do not include Cash…

A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want…

Q: That a business may only report activities on financial statements that are specifically related…

A: Accounting concepts are those rules and regulations which are used for the purpose of accounting and…

Q: These are those which do not give rise to a right to receive (or an obligation to deliver) a fixed…

A: As per IAS 21, Effects of changes in foreign exchange rates, the monetary items are those items that…

Q: Which statement is true concerning the accrual basis of accounting? Revenues are recognized when…

A: There are two accounting methods which are currently used by the business. One is cash basis of…

Q: The concept of verifiability is complied with when an accounting transaction occurs tha A. involves…

A: A. Involves an arm length transaction between two independent interests

Q: GAAP does not allow cash basis accounting to be used in external financial reports. True or…

A: GAAP gives the accounting rules and standards that are used to prepare the financial reports of an…

Q: How many of the following statements regarding the Revenue Recognition and Matching Principles are…

A: The revenue recognition principle state that organizations should recognize the revenue when the…

Q: If the statement of financial position error is discovered in the year of error, what action is to…

A: Errors mean the data entered in the financial system is not as per accounting standard. There has…

Q: UNDER THE ACCRUAL BASIS OF ACCOUNTING, IF CASH IS RECEIVED PRIOR TO THE SALE, THEN: A. REVENUE IS…

A: Under accrual basis of accounting system, revenue is recognised only when it is earned. If the cash…

Q: Which of the following statements is not applicable to revenue recognition guidance under ASC Topic…

A: In the given case all of the following are true regarding revenue recognition principal provided in…

Q: With respect to the concept of materiality, which of the following statements is correct?a.…

A: Definition: Materiality: Materiality is the event or amount that influences financial statements on…

Q: accruals

A: Under Accrual concept, revenue is recognized when it is earned and expense is recognized when it is…

Q: Under the cash basis of accounting: expenses are matched with the revenue that is produced. cash…

A: Under the cash basis of accounting cash must be received before revenue is recognized.

Q: Which statement is incorrect? a. Revenues are income that arises from the ordinary course of…

A: The flow of income that is generated by the regular sale of goods and services is regarded as…

Q: Which of the following principles of accounting are not directly related to accounting depletion…

A: Correct Option : Historical Cost Depletion means the allocation of cost of natural resources…

Q: ncerned with? a) Providing statutory information for external use b) Providing internal information…

A: The right answer is option b) Providing internal information for use by management

Q: Under accrual accounting, when are revenue and expenses recognized? Revenue is recognized when cash…

A: Under the accrual basis of accounting, revenue is considered to have been earned when goods are sold…

Q: Theseransactions which are related to revenue or expense recognition, identify whether they are are…

A: Accruals: Accruals are the revenues that are earned but not received, and expenses that are incurred…

Q: Which of the following is correct? Events that change a company's financial statements are…

A: Accounting principles means those set of standards which is followed while preparing the books of…

Q: Under Philippine Financial Reporting Standards A. the cash basis of accounting is accepted. B.…

A: Philippines adopted the IFRS which are known as PFRS.

Q: How do modifying entries relate to the difference between cash accrual accounting and the difference…

A: Introduction : All cash transactions must be converted into accrual accounting for adjustment…

Q: A special purpose framework that is a non-GAAP financial reporting framework, that employs either a…

A: A non-GAAP financial reporting framework that uses cash, tax, regulatory, contractual, or other…

Q: Under the modified accrual basis of accounting, expenditures generally are not recognized until: a.…

A: The modified accrual basis of accounting comprises of cash and accrual basis of accounting.it is a…

Q: Under accrual accounting, revenue is recorded and reported only Group of answer choices A. when cash…

A: As per the cash basis of accounting, we should record the transaction only when corresponding cash…

Q: The term “deferral” as used in accounting means a. to split the earned and unearned portions of an…

A: Solution: Deferral in accounting means any income or expense is not recognized until a future date.…

Q: Which of the following statements reflects an accurate comparison of cash-basis versus accrual-basis…

A: The cash-basis is a method under which only cash revenue and cash expenses are recorded.…

Q: Which of the following is in accordance with generally accepted accounting principles? Accrual-basis…

A: Solution 26: Generally accepted accounting standard means a set of accounting principles, standards…

Q: Which of the following statements is characteristic of accrual basis accounting? Expenses are…

A: Cash basis accounting: In cash basis accounting , revenue are recognized when payment is received…

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

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.
With respect to the concept of materiality, which of the following statements is correct?a. Materiality depends only on the dollar amount of an item relative to other items in the financial statements.b. Materiality depends on the nature of a transaction rather than the dollar amount of the transaction.c. Materiality is determined by reference to AICPA guidelines.d. Materiality is a matter of professional judgment.
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 should be treated as a change in accountingpolicy? A. A change is made in the method of calculating the provision for uncollectible accounts receivable B. A change from cost model to fair value model in measuring investment property C. An entity engaging in construction contract for the first time needs on accounting policy to deal with this D. All of the choices qualify as a change in accounting policy
In cash basis accounting, for tax purposes: a.Income is generally recognized when it is actually or constructively received and expenses are generally recognized when they are paid. b.Income is recognized when it is earned regardless of when received and expenses are recognized when they are actually or constructively incurred. c.The cash basis is not allowed for businesses reported on Schedule C. d.Income is recognized when it is actually or constructively received and expenses are recognized when they are actually or constructively incurred, regardless of when paid.
According to accruals rules, when a service is performed, the revenue should be recognized (recorded, accrued), interest income and rental income are an example of accrued revenue. Expenses recognition is also not directly related to cash payment. Expense should be recorded, when it occurs, not is paid. a) Please give a different example of accruals, and write a numeric example for it with accounting entries. b) Please classify differences between accrued expenses, payables, and provisions. Give an example for each one.
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.
The cash basis and accrual basis of accounting in the public sector in terms of A. Recognition of revenue B. Recognition of expenditure C. Disclosure of non financial assets D. Notion of depreciation Please answer part A-D
UNDER THE ACCRUAL BASIS OF ACCOUNTING, IF CASH IS RECEIVED PRIOR TO THE SALE, THEN: A. REVENUE IS RECOGNIZED WHEN THE CASH IS RECEIVED. B. A LIABILITY IS RECOGNIZED WHEN CASH IS RECEIVED. C. A LIABILITY IS REMOVED FROM THE SYSTEM WHEN THE CASH IS RECEIVED. D. REVENUE IS REMOVED FROM THE SYSTEM WHEN THE SERVICES HAVE BEEN PERFORMED OR THE GOODS HAVE BEEN DELIVERED.
Which of the following should be treated as a change in accounting policy? A change is made in the method of calculating the provision for uncollectible accounts receivable A change from cost model to fair value model in measuring investment property An entity engaging in construction contract for the first time needs on accounting policy to deal with this All of the choices qualify as a change in accounting policy
True or False: Under the accrual accounting method, revenue is recognized when cash is received, regardless of when the goods or services are delivered.
Under accrual accounting, which of the following is an appropriate accounting policy regarding recognizing assets as expenses? Assets should be recognized as expenses when the assets are paid for. Assets should be recognized as expenses when the assets are received. Assets should not be recognized as expenses, because assets are different from expenses. Assets should be recognized as expenses when their economic benefits expire.