ACCOUTING PRIN SET LL INCLUSIVE
14th Edition
ISBN: 9781119815327
Author: Weygandt
Publisher: WILEY
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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 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 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.
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- 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 accountingarrow_forwardWhich of the following is not a criterion to recognize revenue under GAAP? GAAP requires that the accrual basis accounting principle be used in the revenue recognition process. The earnings process must be completed. A product or service must be provided. Cash must be collected O O O Oarrow_forwardWhat’s the correct answer?arrow_forward
- 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.arrow_forwardPorite 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.arrow_forwardHow is the valuation of cuIrent assets affected if the company follows IFRS? ( OValuation is based on historical cost. OValuation is based on market adjustments. OValuation is based on LCM accounting. O Assets are expensed immediately. Aliability created for receiving cash for future services to be provided is termed O service revenue. O estimated warranty payable. Ounearned revenue. Oaccrued liability.arrow_forward
- The monetary unit assumption states that transactions that can be measured in terms of money should be recorded in the accounting records. Select one: O True O Falsearrow_forwardWhich 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.arrow_forwardWhich accounting principle requires that revenue be recognized when it is earned, regardless of when payment is received? A. Matching Principle B. Revenue Recognition Principle C. Historical Cost Principle D. Full Disclosure Principlearrow_forward
- (a)Explain, using practical example the effect of accruals figures on the preparation of a financial statement. (b)Suggest Four reasons why there might be difference between the balance on the receivable ledger control account and the total list of accounts receivable ledger balances. (c)Explain, using practical example how Capital expenditure should be capitalizedarrow_forwardWhat 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 assetsarrow_forwardWhen opposed to cash-basis accounting, does accrual-basis accounting offer more meaningful information? If not, why not? Give an example to support your argument.arrow_forward
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