Which statement is false? A. Revenues and expenses result from regular activities of the business. B. Gains and losses result from incidental transactions of the business. C. Generally, revenue is recognized when the earning process is complete and a valid promise of payment has been received. D. An expense is recognized immediately in the income statement when an expenditure produces no future economic benefits. E. None of the above

Which statement is false? A. Revenues and expenses result from regular activities of the business. B. Gains and losses result from incidental transactions of the business. C. Generally, revenue is recognized when the earning process is complete and a valid promise of payment has been received. D. An expense is recognized immediately in the income statement when an expenditure produces no future economic benefits. E. None of the above

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter3: Analyzing And Recording Transactions

Section: Chapter Questions

Problem 10MC: Which of the following is the principle that a business must report any business activities that...

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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
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 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.
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Which statement is false? * Revenues and expenses result from regular activities of the business. Gains and losses result from incidental transactions of the business. Generally, revenue is recognized when the earning process is complete and a valid promise of payment has been received. An expense is recognized immediately in the income statement when an expenditure produces no future economic benefits
Which statement is incorrect? * Revenues are income that arises from the ordinary course of business activities. Revenues may arise from decrease in liability from primary operations. Generally, revenue is recognized when the earning process is complete and a valid promise of payment has been received. Revenues arise from sale of goods or services, use of entity resources and disposal of noncurrent assets of the businesses. None of the above
Which statement is incorrect? a. Revenues are income that arises from the ordinary course of business activities. b. Revenues may arise from decrease in liability from primary operations. c. Generally, revenue is recognized when the earning process is complete and a valid promise of payment has been received. d. Revenues arise from sale of goods or services, use of entity resources and disposal of noncurrent assets of the businesses. e. None of the above v
Which statement is incorrect? A. Revenues are income that arises from the ordinary course of business activities. B. Revenues may arise from decrease in liability from primary operations. C. Generally, revenue is recognized when the earning process is complete and a valid promise of payment has been received. D. Revenues arise from sale of goods or services, use of entity resources and disposal of noncurrent assets of the businesses. E. None of the above
Do expenses imply "sacrifices" required in the effort the business makes to generate revenue? Correct False
Factors that reflect the ability of a business to pay its debts and earn a reasonable amount of income are referred to as solvency, profitability, and liquidity. O True False 00
In a multiple-step income statement, interest expense usually is not classified as an operating expense because interest charges: a do not contribute to the production of revenue. b Relate directly to the cost of goods sold. c Stem from the manner in which assets are financed, not the manner in which they are used in business operations. d The statement is incorrect. Interest usually is classified as an operating expense.