The accrual basis of accounting means_______________________. sales are recorded as cash is received to accumulate over time, based on a natural observable increase gather together like transactions for more efficient entry to the accouitng system none of the answers listed defines the meaning of accrual accounting
Question 2. 2. Under accrual basis accounting revenue is not recognized until _________________. Cash is received A customer purchase order is received A customer agrees to a price and they shake hands with the sales person The product is sold and delivered to the end customer.
Question 3. 3. The matching principle states ______________________________. expenses associated with revenue creation should be recorded in the same period as the revenue expenses that recur should be recorded in a systematic manner expenses that have not related to any future period should be expensed in the current period all of these answers are correct relating to the matching principle
Question 4. 4. Adjusting entries apply to ___________________________. All of these entries Prepaids Depreciation Unearned revenue.
Question 5. 5. Depreciation is _________________________________________. The valuation of assets of a business A method to increase an assets book value The transfer of an asset's cost to expense over the expected useful life of the asset The opposite of residual value.
Question 6. 6. Which one of the following is not one of the seven steps in the accounting cycle? ( :) Count the cash Examine source documents Perhaps construct a trial balance Determine and post adjusting entries