Ch. 3 Adjusting Entries part 1

A broad principle that requires identifying the activities of a business with specific time periods such as months, quarters, or years is the: 

• Time period assumption
• Going-concern assumption
• Matching principle
• Accrual basis of accounting

The accounting principle that requires revenue to be recorded when earned is the: 

• Matching principle
• Revenue recognition principle
• Accrual reporting principle
• Expense recognition principle

The accounting principle that requires expenses to be recorded when earned is the: 

• Matching principle
• Revenue recognition principle
• Accrual reporting principle
• Expense recognition principle

The main purpose of adjusting entries is to: 

• Record external transactions and events
• Recognize assets purchased during the period
• Recognize debts paid during the period
• Correct errors in the accounting records

The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is: 

• Cash basis accounting
• The matching principle
• Accrual basis accounting
• Revenue basis accounting

Which accounting method is GAAP?

• Accrual basis accounting
• Cash basis accounting

Long-term tangible assets used to produce and sell products and services.

• Prepaid assets
• Short-term assets
• Plant assets
• Intangible assets

An account linked with another account that has an opposite normal balance and is reported as a subtraction from that other account's balance.

• Opposite account
• Negative normal account
• Book value account
• Contra account

The difference between an asset account and accumulated depreciation is:

• Purchase price
• Book value
• Depreciation expense
• Contra account

Deferred revenues are:

• Assets
• Liabilities
• Owner's equity
• Expenses