Accounting 101 Exam 2 Questions And Already Passed Answers.
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Course
Accounting 101
Institution
Accounting 101
accrual basis - Answer expenses are matched with the related revenues and/or are reported when the expense occurs, not when the cash is paid
revenue recognition principle - Answer cornerstone of accrual accounting together with the matching principle. They both determine the accounting per...
Accounting 101 Exam 2 Questions And
Already Passed Answers.
accrual basis - Answer expenses are matched with the related revenues and/or are reported when the
expense occurs, not when the cash is paid
revenue recognition principle - Answer cornerstone of accrual accounting together with the matching
principle. They both determine the accounting period, in which revenues and expenses are recognized
matching (expense) principle - Answer states that expenses should be recorded during the period in
which they are incurred, regardless of when the transfer of cash occurs.
cash basis - Answer refers to a major accounting method that recognizes revenues and expenses at the
time physical cash is actually received or paid out
adjusting entries - Answer accounting journal entries that convert a company's accounting records to
the accrual basis of accounting. An adjusting journal entry is typically made just prior to issuing a
company's financial statements.
accrued asset - Answer revenues earned by the seller for delivery of goods and services, for which the
seller has not yet received payment.
accrued liability - Answer liabilities that reflect expenses on the income statement that have not been
paid or logged under accounts payable during an accounting period; in other words, obligations for
goods and services provided to a company for which invoices have not yet been received
deferred revenue - Answer is not yet revenue. It is an amount that was received by a company in
advance of earning it. The amount unearned (and therefore deferred) as of the date of the financial
statements should be reported as a liability
deferred expense - Answer s a cost that has already been incurred, but which has not yet been
consumed. The cost is recorded as an asset until such time as the underlying goods or services are
consumed; at that point, the cost is charged to expense
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