The balance of an account is determined by a.adding all of the debits, adding all of the credits, and then subtracting the smaller sum from the larger sum b.always subtracting the debits from the credits c.adding all of the debits to all of the credits d.always subtracting the credits from the debits
The balance of an account is determined by a.adding all of the debits, adding all of the credits, and then subtracting the smaller sum from the larger sum b.always subtracting the debits from the credits c.adding all of the debits to all of the credits d.always subtracting the credits from the debits
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The balance of an account is determined by
a.adding all of the debits, adding all of the credits, and then subtracting the smaller sum from the larger sum
b.always subtracting the debits from the credits
c.adding all of the debits to all of the credits
d.always subtracting the credits from the debits
The matching principle
a.requires that the dollar amount of debits equal the dollar amount of credits on a trial balance
b.states that the revenues and related expenses should be reported in the same period
c.addresses the relationship between the journal and the balance sheet
d.determines whether the normal balance of an account is a debit or credit
Using accrual accounting, expenses are recorded and reported only
a.when they are incurred, whether or not cash is paid
b.when they are incurred and paid at the same time
c.if they are paid before they are incurred
d.if they are paid after they are incurred
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