1. The matching concept a. addresses the relationship between the journal and th
ID: 2552615 • Letter: 1
Question
1. The matching concept a. addresses the relationship between the journal and the balance sheet. b. determines whether the normal balance of an account is a debit or credit. c. requires that the dollar amount of debits equal the dollar amount of credits on a trial balance. d. states that the revenues and related expenses should be reported in the same period. 2. Using accrual accounting, revenue is recorded and reported only a. when cash is received without regard to when the services are rendered. b. when the services are rendered without regard to when cash is received. c, when cash is received at the time services are rendered d. if cash is received after the services are rendered. Using accrual accounting, expenses are recorded and reported only a. when they are incurred, whether or not cash is paid b. when they are incurred and paid at the same time c. if they are paid before they are incurred d. if they are paid after they are incurred 3. 4. The accounting concepts upon which deferrals and accruals are based is a. matching b.cost c. price-level adjustment d. conservatism 5. Deferred expenses have a. not yet been recorded as expenses but have been paid b. been recorded as expenses and paid c. been incurred and paid d. not yet been recorded as expenses 6. Deferred revenue is revenue that is a. earned and the cash has been received b. earned but the cash has not been received c. not earned and the cash has not been received d. not earned but the cash has been received 7. Adjusting entries are a. the same as correcting entries b. needed to bring accounts up to date and match revenue and expense c. optional under generally accepted accounting principlesExplanation / Answer
1)correct option is "D" -
According to matching concept all expense incurred to earn revenue should be recognised in the same period in which revenue whether paid or not
2)correct option is "B"
revenue should be recognised in the period it is earned whether cash is received or not is irrelevant
3)correct option is "A"
Expense should be recognised in the period in which it is incurred whether paid or not
4)correct option is a"
accruals and deferrals are based on matching principle as accoridng to this concept revenue and expense should be recognised in the period it is earned and incurred.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.