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Questions and Answers
Which method of measuring income recognizes revenue when a company receives cash and expenses when it pays cash?
Which method of measuring income recognizes revenue when a company receives cash and expenses when it pays cash?
- Both Accrual Basis and Cash basis
- Neither Accrual Basis nor Cash basis
- Cash basis (correct)
- Accrual Basis
What is the increase in net assets from the sale of goods and services called?
What is the increase in net assets from the sale of goods and services called?
- Accounts receivable
- Expenses
- Revenue (correct)
- Income
What is the excess of revenues over expenses called?
What is the excess of revenues over expenses called?
- Revenue
- Expenses
- Accounts receivable
- Income (correct)
Which of the following is a requirement for revenue recognition under the accrual basis?
Which of the following is a requirement for revenue recognition under the accrual basis?
What is the purpose of the matching method in recognizing revenues?
What is the purpose of the matching method in recognizing revenues?
What is the net income on an income statement?
What is the net income on an income statement?
What causes a decrease in the Retained Earnings account?
What causes a decrease in the Retained Earnings account?
Which of the following is a characteristic of the accrual basis of measuring income?
Which of the following is a characteristic of the accrual basis of measuring income?
What is the purpose of preparing financial statements for interim periods?
What is the purpose of preparing financial statements for interim periods?
What is the term used to describe the increase in net assets from the sale of goods and services?
What is the term used to describe the increase in net assets from the sale of goods and services?
Which of the following is true about expenses?
Which of the following is true about expenses?
What is the term used to describe the original acquisition cost of the inventory that a company sells to customers during the reporting period?
What is the term used to describe the original acquisition cost of the inventory that a company sells to customers during the reporting period?
What is the term used to describe the total cumulative owners' equity generated by income?
What is the term used to describe the total cumulative owners' equity generated by income?
What percentage of publicly traded US companies use the fiscal year to measure income?
What percentage of publicly traded US companies use the fiscal year to measure income?
Which of the following is NOT a requirement for revenue recognition under the accrual basis?
Which of the following is NOT a requirement for revenue recognition under the accrual basis?
Which of the following expenses are NOT linked to revenues?
Which of the following expenses are NOT linked to revenues?
Which financial statement shows all changes during the year in each stockholder's equity account?
Which financial statement shows all changes during the year in each stockholder's equity account?
What is the bottom line on an income statement called?
What is the bottom line on an income statement called?
What is the distribution of cash to stockholders called?
What is the distribution of cash to stockholders called?
What is the term used for the increase in net assets from the sale of goods and services?
What is the term used for the increase in net assets from the sale of goods and services?
What causes a decrease in the Retained Earnings account?
What causes a decrease in the Retained Earnings account?
What are changes in stockholders' equity that do not result from net income or transactions with shareholders called?
What are changes in stockholders' equity that do not result from net income or transactions with shareholders called?
