Homework Answers
The process of recognising revenue as and when they are earned and matching the expense with respect to the revenue is termed as matching principle of accounting where in the revenue earned is to be recognised in the period when the revenue is is accrued irrespective of whether the cash has been received or not and also so any expense incurred in order to earn the revenue is to be recognised in the same period.
Accrual basis accounting means any expense or revenue is to be recorded on the accrual basis irrespective of whether the cash has been received or paid . Also the revenue recognition principle explain that the revenue is to be recorded on the accrual basis even though the cash is received in the next period.
Cash basis accounting explain that the accounting is to be done on the cash basis and not on the accrual basis it is just opposite the accrual accounting principle where are the revenue and expenses are recorded as and when the cash is received or paid.
Therefore the process to prepare financial statement based on recognising revenue when they are earned and matching expense to those revenue is termed as the matching principle.
Therefore the correct option is 3rd.
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The approach to preparing financial statements based on recognizing revenues when they are earned and matching...
5. The system of preparing financial statements based on recognizing revenues when the cabin when the...
5. The system of preparing financial statements based on recognizing revenues when the cabin when the cash is paid is called: A Accrual basis accounting. C. Revenue recognition accounting. B. Operating cycle accounting. D. Cash basis accounting. 6. The primary difference between deferred and accrued expenses is that deferred expenses have: A Been incurred and accrued expenses have not B. Not been incurred and accrued expenses have been incurred C Been recorded and accrued expenses have not been incurred D....
Which accounting principle supports reporting revenues in the priod they are earned? Select one: a. accounting...
Which accounting principle supports reporting revenues in the priod they are earned? Select one: a. accounting period b. revenue recognition c. matching d. cash basis
Mastery Problem: The Adjusting Process. Unadjusted Financial Statements These financial statements were prepared from the unadjusted...
Mastery Problem: The Adjusting Process. Unadjusted Financial Statements These financial statements were prepared from the unadjusted trial balance. Cole Designs Inc. Income Statement For the Year Ended December 31, 20Y3 Fees earned $69,400 Wages expense (44,600) Net income $24,800 Cole Designs Inc. Balance Sheet December 31, 20Y3 Assets Cash Accounts receivable Supplies Prepaid insurance Office equipment Total assets Liabilities Unearned fees Stockholders' Equity $4,250 31,800 3,650 4,600 11,000 $55,300 $10,100 Chapter 3 Quiz Calculator $10,100 Unearned fees Stockholders' Equity Common...
Unadjusted Financial Statements income Statement For the Year Ended December 31, 2017 Service revenue $70,600.00 Wages...
Unadjusted Financial Statements income Statement For the Year Ended December 31, 2017 Service revenue $70,600.00 Wages expense 44,300.00 Net income $26,300.00 Cole Designs Inc. Balance Sheet December 31, 2017 Assets Cash $5,000.00 Accounts receivable 32,600.00 Supplies 3,650.00 5 Prepaid insurance 4,000.00 6 Office equipment 11,000.00 Total assets $56,250.00 Liabilities Unearned revenue $9,500.00 Stockholders' Equity Common stock $12,000.00 12 Retained earnings 34,750.00 46,750.00 13 Total liabilities and stockholders'equity $56,250.00 Cole Designs Inc. Income Statement For the Year Ended December 31, 2017...
accounting principle
What is Accounting principle?Accounting principles are fundamental guidelines that shape the discipline of accounting, providing a structured framework for recording, reporting, and analyzing financial transactions. These principles, integral to maintaining consistency, accuracy, and transparency in financial reporting, include the accrual principle, emphasizing the recording of transactions when they occur rather than when cash changes hands. The consistency principle underscores the importance of applying chosen accounting methods uniformly over time, fostering comparability across financial statements. The materiality principle advocates for the...
Match each of the numbered descriptions with the principle or assumption it best reflects. Principle/Assumption Description...
Match each of the numbered descriptions with the principle or assumption it best reflects. Principle/Assumption Description 1. A company reports details behind financial statements that would impact users' decisions 2. Financial statements reflect the assumption that the business continues operating 3. A company records the expenses incurred to generate the revenues reported 4. Concepts, assumptions, and guidelines for preparing financial statements. 5. Each business is accounted for separately from its owner or owners. 6. Revenue is recorded when products and...
Accounting: Information for Decisions - Wild, Shaw, Chiappetta, 70, Adjusting Accounts for Financial Statements Type your...
Accounting: Information for Decisions - Wild, Shaw, Chiappetta, 70, Adjusting Accounts for Financial Statements Type your answer in the box. The expense recognition (matching) principle aims to record (expenses/assets/ilabilities) in the same accounting period as the (expenses/revenues/assets) that are earned as a result of those costs. This principle is a major part of the (timing/adjusting/estimating process, Read about the Do you know the answer? I know it Thako No Idee www w w w, Snow, Chiappetta, 7e, Adjusting Accounts for...
Explain the revenue recognition principle and the matching principle. Differentiate between the cash basis and the...
Explain the revenue recognition principle and the matching principle. Differentiate between the cash basis and the accrual basis of accounting. Explain why adjusting entries are needed and identify the major types of adjusting entries.
c. Expenses decrease stockholders' equity. d. Expenses are a negative factor in the computation of net...
c. Expenses decrease stockholders' equity. d. Expenses are a negative factor in the computation of net income 26. A revenue account a is increased with a debit b is decreased with a credit c. is increased with a credit. d. has a normal balance of a debit. 27. The Dividends account a. appears on the income statement along with the expenses of the business b mast show transactions every accounting period. c. is increased with debits and decreased with credits...
6. Which is an example of the Matching Principle? a. Recognizing revenue when the work has...
6. Which is an example of the Matching Principle? a. Recognizing revenue when the work has been completed b. Internal and external audit teams working together c. Selling a long-term asset d. Delaying expense recognition for a prepaid expense
5. The system of preparing financial statements based on recognizing revenues when the cabin when the cash is paid is called: A Accrual basis accounting. C. Revenue recognition accounting. B. Operating cycle accounting. D. Cash basis accounting. 6. The primary difference between deferred and accrued expenses is that deferred expenses have: A Been incurred and accrued expenses have not B. Not been incurred and accrued expenses have been incurred C Been recorded and accrued expenses have not been incurred D....
Mastery Problem: The Adjusting Process. Unadjusted Financial Statements These financial statements were prepared from the unadjusted trial balance. Cole Designs Inc. Income Statement For the Year Ended December 31, 20Y3 Fees earned $69,400 Wages expense (44,600) Net income $24,800 Cole Designs Inc. Balance Sheet December 31, 20Y3 Assets Cash Accounts receivable Supplies Prepaid insurance Office equipment Total assets Liabilities Unearned fees Stockholders' Equity $4,250 31,800 3,650 4,600 11,000 $55,300 $10,100 Chapter 3 Quiz Calculator $10,100 Unearned fees Stockholders' Equity Common...
Unadjusted Financial Statements income Statement For the Year Ended December 31, 2017 Service revenue $70,600.00 Wages expense 44,300.00 Net income $26,300.00 Cole Designs Inc. Balance Sheet December 31, 2017 Assets Cash $5,000.00 Accounts receivable 32,600.00 Supplies 3,650.00 5 Prepaid insurance 4,000.00 6 Office equipment 11,000.00 Total assets $56,250.00 Liabilities Unearned revenue $9,500.00 Stockholders' Equity Common stock $12,000.00 12 Retained earnings 34,750.00 46,750.00 13 Total liabilities and stockholders'equity $56,250.00 Cole Designs Inc. Income Statement For the Year Ended December 31, 2017...
Match each of the numbered descriptions with the principle or assumption it best reflects. Principle/Assumption Description 1. A company reports details behind financial statements that would impact users' decisions 2. Financial statements reflect the assumption that the business continues operating 3. A company records the expenses incurred to generate the revenues reported 4. Concepts, assumptions, and guidelines for preparing financial statements. 5. Each business is accounted for separately from its owner or owners. 6. Revenue is recorded when products and...
Accounting: Information for Decisions - Wild, Shaw, Chiappetta, 70, Adjusting Accounts for Financial Statements Type your answer in the box. The expense recognition (matching) principle aims to record (expenses/assets/ilabilities) in the same accounting period as the (expenses/revenues/assets) that are earned as a result of those costs. This principle is a major part of the (timing/adjusting/estimating process, Read about the Do you know the answer? I know it Thako No Idee www w w w, Snow, Chiappetta, 7e, Adjusting Accounts for...
c. Expenses decrease stockholders' equity. d. Expenses are a negative factor in the computation of net income 26. A revenue account a is increased with a debit b is decreased with a credit c. is increased with a credit. d. has a normal balance of a debit. 27. The Dividends account a. appears on the income statement along with the expenses of the business b mast show transactions every accounting period. c. is increased with debits and decreased with credits...
6. Which is an example of the Matching Principle? a. Recognizing revenue when the work has been completed b. Internal and external audit teams working together c. Selling a long-term asset d. Delaying expense recognition for a prepaid expense
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