Solved

Match the Following Terms with the Appropriate Definition

Question 150

Matching

Match the following terms with the appropriate definition:

Premises:

Responses:

Matching principle

Net income divided by net sales.

Profit margin

Items paid for in advance of receiving their benefits.

Accrual basis accounting

The expense created by allocating the cost of plant and equipment to the periods in which they are used.

Cash basis accounting

Requires that revenue be recorded when earned.

Revenue recognition principle

Revenues earned in a period that are both unrecorded and not yet received in cash or other assets.

Depreciation

The accounting system that recognizes revenues when earned and expenses when incurred.

Time period assumption

The accounting system where revenues are recognized when cash is received and expenses are recorded when cash is paid.

Prepaid expenses

The principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses.

Accrued revenues

A principle that assumes that an organization's activities can be divided into specific time periods such as months, quarters or years.

Premises:

Matching principle

Profit margin

Accrual basis accounting

Cash basis accounting

Revenue recognition principle

Depreciation

Time period assumption

Prepaid expenses

Accrued revenues

Responses:

Net income divided by net sales.

Items paid for in advance of receiving their benefits.

The expense created by allocating the cost of plant and equipment to the periods in which they are used.

Requires that revenue be recorded when earned.

Revenues earned in a period that are both unrecorded and not yet received in cash or other assets.

The accounting system that recognizes revenues when earned and expenses when incurred.

The accounting system where revenues are recognized when cash is received and expenses are recorded when cash is paid.

The principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses.

A principle that assumes that an organization's activities can be divided into specific time periods such as months, quarters or years.

Correct Answer:

Premises:

Responses:

Matching principle

Profit margin

Accrual basis accounting

Cash basis accounting

Revenue recognition principle

Depreciation

Time period assumption

Prepaid expenses

Accrued revenues