entSessionLocator assignment-take M C Search The final step in the accounting cy

ID: 2562500 • Letter: E

Question

entSessionLocator assignment-take M C Search The final step in the accounting cycle whereby all revenue, expense, and dividend account balances are transferred to the Retained Earnings account Accrual basis of accounting Cash is received before revenue is earned. Cash basis of accounting Entries made into the general journal at the end of arn accounting period that record previously unrecorded revenues or expenses. Adjusting journal entries Expense is incurred before cash s pa Deferred revenue Revenues are recorded only when cash is received, and expenses are recorded only when cash is paid. Accrued revenue Cash is paid before expense is incurred Deferred expense Revenues are recorded only when they are earned, and expenses are recorded only when they are incurred. Accrued expense Revenue is earned before cash is received Closing process 3

Explanation / Answer

Answer:

Accrual Basis of accounting

Revenues are recorded only when they are earned and expenses are recorded only when they are incurred

Cash Basis of Accounting

Revenues are recorded only when cash is received and expenses are recorded only when cash is paid

Adjusting Journal Entries

Entries made into the general journal at the end of an accounting period that record previously unrecorded revenues or expenses.

Deferred Revenue

Cash is received before revenue is earned

Accrued Revenue

Revenue is earned before cash is received

Deferred Expenses

Cash is paid before expense is incurred

Accrued Expense

Expense is incurred before Cash is paid

Closing Process

The Final step in the accounting cycle where by all the Revenue, expense and dividend account balances are transferred to the Retained Earnings account