Matching
Match the following definitions with the appropriate term
Premises:
Any 12 consecutive months or 52-week period that a company adopts for its annual reporting period.
A method that allocates equal amounts of an asset's cost (less any salvage value) to depreciation expense during its useful life.
Assumes that an organization's activities can be divided into specific time periods such as months, quarters, or years.
Aims to record expenses in the same accounting period as the revenues that are earned as a result of those expenses.
The accounting system that uses the adjusting process to recognize revenues when earned and expenses when incurred.
The process of allocating the costs of long-term assets to the income statement over their expected useful lives.
Revenues earned in a period that are both unrecorded and not yet received in cash or other assets.
The accounting system that recognizes revenue when cash is received and records expenses when cash is paid.
A set of financial statements that covers less than one year, typically one, three, or six months of activity.
Responses:
Accrual basis accounting
Cash basis accounting
Fiscal year
Interim financial statements
Depreciation
Straight-line depreciation
Time period assumption
Expense recognition (matching) principle
Accrued revenues
Correct Answer:
Premises:
Responses:
Any 12 consecutive months or 52-week period that a company adopts for its annual reporting period.
A method that allocates equal amounts of an asset's cost (less any salvage value) to depreciation expense during its useful life.
Assumes that an organization's activities can be divided into specific time periods such as months, quarters, or years.
Aims to record expenses in the same accounting period as the revenues that are earned as a result of those expenses.
The accounting system that uses the adjusting process to recognize revenues when earned and expenses when incurred.
The process of allocating the costs of long-term assets to the income statement over their expected useful lives.
Revenues earned in a period that are both unrecorded and not yet received in cash or other assets.
The accounting system that recognizes revenue when cash is received and records expenses when cash is paid.
A set of financial statements that covers less than one year, typically one, three, or six months of activity.
Premises:
Any 12 consecutive months or 52-week period that a company adopts for its annual reporting period.
A method that allocates equal amounts of an asset's cost (less any salvage value) to depreciation expense during its useful life.
Assumes that an organization's activities can be divided into specific time periods such as months, quarters, or years.
Aims to record expenses in the same accounting period as the revenues that are earned as a result of those expenses.
The accounting system that uses the adjusting process to recognize revenues when earned and expenses when incurred.
The process of allocating the costs of long-term assets to the income statement over their expected useful lives.
Revenues earned in a period that are both unrecorded and not yet received in cash or other assets.
The accounting system that recognizes revenue when cash is received and records expenses when cash is paid.
A set of financial statements that covers less than one year, typically one, three, or six months of activity.
Responses:
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