An accrual occurs when:a) Cash is paid after an expense is recordedb) Cash is received before a sale is recordedc) Cash is paid before an expense is recordedCash is received andd)simultaneouslyrecorded

Explanation of Accrual:Accrual refers to the accounting method where revenues and expenses are…

Answered: An accrual occurs when: a) Cash is paid…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter4: The Adjustment Process

Section: Chapter Questions

Problem 1EA: Identify whether each of the following transactions, which are related to revenue recognition, are...

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Identify whether each of the following transactions, which are related to revenue recognition, are accrual, deferral, or neither. A. sold goods to customers on credit B. collected cash from customer accounts C. sold goods to customers for cash D. collected cash in advance for goods to be delivered later
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? A. accrual basis accounting B. cash basis accounting C. tax basis accounting D. revenue basis accounting
Which account is least likely to be debited when revenueis recorded?a. Accounts Payableb. Accounts Receivablec. Cashd. Unearned Revenue
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.
When converting from cash basis to accrual basis accounting, which of the following adjustments should be made to cash receipts from customers to determine accrual basis service revenue. a. Subtract ending accounts receivable. b. Subtract beginning unearned service revenue. c. Add ending accounts receivable. d. Add cash sales.
Under accrual-basis accounting,sales made on credit are usually reported as: A.liabilities B.revenue C.a contra account to sales revenue D.cash from operating activities
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.
The revenue recognition principle states that revenue should be recorded in the same period as the cash is received. O True O False
A "sale on account" results in a debit to: Accounts Receivable O Cash O Capital Accounts Payable
The system of preparing financial statements based on recording events when the cash is received and reporting expenses when the cash is paid is called: a. Accrual basis accounting. b. Operating cycle accounting. c. Cash basis accounting. d. Revenue recognition accounting. e. Current basis accounting.
An expense transaction is posted to accounts payable and is assigned to a vendor. In which account will this transaction be reflected on a cash-basis Profit and Loss report? Uncategorized Expense Uncategorized Income Unapplied Cash Bill Payment Expense Unapplied Cash Payment Income Sales of Product Income
Using accrual accounting, when is revenue recognized?A. When cash transfers B. When the performance obligation is fulfilled C. When products is received FOB shipping point D. When the products is shipped FOB destin

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An accrual occurs when: a) Cash is paid after an expense is recorded b) Cash is received before a sale is recorded c) Cash is paid before an expense is recorded Cash is received and d) simultaneously recorded