Matching
Match each definition to its term
Premises:
The expense created by allocating the cost of plant and equipment to the periods in which they are used
The principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses
Items paid for in advance of receiving their benefits
Allocates equal amounts of an asset's cost (less any salvage value) to depreciation expense during its useful life
The accounting system that recognizes revenues when earned and expenses when incurred
A principle that assumes that an organization's activities can be divided into specific time periods such as months, quarters or years
Revenues earned in a period that are both unrecorded and not yet received in cash or other assets
Net income divided by net sales
The accounting system where revenues are recognized when cash is received and expenses are recorded when cash is paid
Responses:
Prepaid expenses
Straight-line depreciation
Time period principle
Matching principle
Accrual basis accounting
Depreciation
Accrued revenues
Cash basis accounting
Profit margin
Correct Answer:
Premises:
Responses:
The expense created by allocating the cost of plant and equipment to the periods in which they are used
The principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses
Items paid for in advance of receiving their benefits
Allocates equal amounts of an asset's cost (less any salvage value) to depreciation expense during its useful life
The accounting system that recognizes revenues when earned and expenses when incurred
A principle that assumes that an organization's activities can be divided into specific time periods such as months, quarters or years
Revenues earned in a period that are both unrecorded and not yet received in cash or other assets
Net income divided by net sales
The accounting system where revenues are recognized when cash is received and expenses are recorded when cash is paid
Premises:
The expense created by allocating the cost of plant and equipment to the periods in which they are used
The principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses
Items paid for in advance of receiving their benefits
Allocates equal amounts of an asset's cost (less any salvage value) to depreciation expense during its useful life
The accounting system that recognizes revenues when earned and expenses when incurred
A principle that assumes that an organization's activities can be divided into specific time periods such as months, quarters or years
Revenues earned in a period that are both unrecorded and not yet received in cash or other assets
Net income divided by net sales
The accounting system where revenues are recognized when cash is received and expenses are recorded when cash is paid
Responses:
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