3) Wilson Company recognizes revenue in the period in which it records an asset for the related account receivable, rather than in the period in which the account receivable is collected in cash. Wilson's practice is an example of: A) Economic entity. B) Accrual accounting. C) The matching principle. D) Cash basis accounting.

3) Wilson Company recognizes revenue in the period in which it records an asset for the related account receivable, rather than in the period in which the account receivable is collected in cash. Wilson's practice is an example of: A) Economic entity. B) Accrual accounting. C) The matching principle. D) Cash basis accounting.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 1MC: Which of the following is not a criterion to recognize revenue under GAAP? A. The earnings process...

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Similar questions

Which of the following is not a criterion to recognize revenue under GAAP? A. The earnings process must be completed. B. A product or service must be provided. C. Cash must be collected. D. GAAP requires that the accrual basis accounting principle be used in the revenue recognition process.
Which of the following statements is true? Under cash-basis accounting, revenues are recorded when a company satisfies its performance obligations and expenses are recorded when incurred. Accrual-basis accounting records both cash and noncash transactions when they occur. Generally accepted accounting principles require companies to use cash-basis accounting. The key elements of accrual-basis accounting are the revenue recognition principle, the expense recognition principle, and the historical cost principle.
The matching principle in accounting requires the matching of debits and credits.
Porite Company recognizes revenue in the period in which it records an asset for the related account receivable, rather than in the period in which the account receivable is collected in cash. Porite's practice is an example of: Multiple Choice O Economic entity. The matching principle. Accrual accounting. Cash basis accounting.
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Which of the following statements reflects an accurate comparison of cash-basis versus accrual-basis accounting? The difference between cash-basis and accrual-basis accounting is a matter of timing. The matching principle applies, regardless of whether cash-basis or accrual-basis accounting is used. IFRS and ASPE both allow for use of either cash-basis or accrual-basis accounting. Net income will be the same regardless of whether cash-basis or accrual-basis accounting is used.
Which of the following statements is characteristic of accrual basis accounting? Expenses are recorded when payment is made. Revenue is recognized when payment is received. Transactions are recorded when they occur. The exchange of cash determines timing of revenue recognition.
What is the difference between ‘Cash’ basis and ‘Accrual’ basis of accounting. Explain the matching concept by incorporating the terms ‘recognized’, revenue recognition principle, and expense recognition principle. Explain and provide two examples of quick assets
Which of the following states that a transaction is not recorded in the books of accounts unless it is measurable in terms of money? a. Matching principle. b. Revenue recognition principle. c. Time period assumption. d. Monetary unit assumption.
Revenues and expenses must be recorded in the accounting period in which they were earned or incurred, no matter when cash receipts or outlays occur under which of the following accounting methods? revenue basis accounting B accrual basis accounting cash basis accounting tax basis accounting cr
Solve this question with steps please. The subject is fundamental of financial accounting.
Financial statements are prepared under the accrual basis, because The accrual basis requires the recording of transactions in terms of debit and credit The accrual basis provides more complete information about an enterprise, compared to the cash basis of accounting. The accrual basis is the only basis used for income tax purposes. The accrual basis considers the timing of the cash inflow and cash outflow in the recognition of income and expenses.