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…

Century 21 Accounting General Journal

11th Edition

ISBN:9781337680059

Author:Gilbertson

Publisher:Gilbertson

Chapter3: Journalizing Transactions

Section3.3: Transactions Affecting Owner’s Equity And Asset Accounts

Problem 2AYU

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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 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.
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 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.
Under the accrual basis of accounting, revenues are reported in the accounting period when which of the following occurs? Cash Is Received Services Or Goods Have Been Delivered
UNDER THE ACCRUAL BASIS OF ACCOUNTING, IF CASH IS RECEIVED PRIOR TO THE SALE, THEN: A. REVENUE IS RECOGNIZED WHEN THE CASH IS RECEIVED. B. A LIABILITY IS RECOGNIZED WHEN CASH IS RECEIVED. C. A LIABILITY IS REMOVED FROM THE SYSTEM WHEN THE CASH IS RECEIVED. D. REVENUE IS REMOVED FROM THE SYSTEM WHEN THE SERVICES HAVE BEEN PERFORMED OR THE GOODS HAVE BEEN DELIVERED.
Revenue is recognized when it is: a) Earned b) Collected in cash c) Invoiced d) Paid for
41. Realization of revenue occurs when a. the item is formally recorded and reported in the financial statements b. noncash resources are converted into cash or rights to cash c. the actual exchange of noncash resources into cash С. d. when a transaction is both realized and realizable 42.A revenue recognition method that recognizes revenue before the time of sale is a. percentage-of-completion b. installment c. cost recovery d. point of sale С.
Accrual accounting recognizes revenues and expenses when cash is received or paid. True or False
Which of the following accounts normally has a debitbalance?a. Unearned Revenueb. Rent Expensec. Retained Earningsd. Sales Revenue

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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