Revenue should be recognized quiz 1 PDF

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Revenue should be recognized in the accounting period in which the performance obligation is satisfied.

T/F

False The revenue recognition principle dictates that revenue is recognized in the period in which the cash is received.

F

The expense recognition principle requires expenses to be included in the accounting period in which they are incurred to earn revenues.

T/F

The expense recognition principle requires that expenses be recognized in the same period that they are paid. C

What is the periodicity assumption?

A. Companies should recognize revenue in the accounting period in which the performance obligation is satisfied. B. Companies should match expenses with revenues. C. The economic life of a business can be divided into artificial time periods. D. The fiscal year should correspond with the calendar year. A

Which principle dictates that efforts (expenses) be matched with results (revenues)?

A. Expense recognition principle

B. Historical cost principle C. Periodicity principle D. Revenue recognition principle C

The generally accepted accounting principle which dictates that revenue be recognized

in the accounting period in which the performance obligation is satisfied is the

A. periodicity assumption. B. expense recognition principle. C. revenue recognition principle. D. accrued revenues principle. F

Because cash- basis accounting does not match revenues and expenses in the proper accounting period, cash-basis accounting does not meet GAAP requirements.

T/F

The cash-basis of accounting is in accordance with generally accepted accounting principles. C

Under the cash-basis of accounting, revenues are recognized when cash is received, not when. performance obligation is satisfied. If revenues are recognized only when a customer pays, what method of accounting is being used?

A. Accrual-basis

B. Recognition basis C. Cash-basis D. Matching basis D...