Gaby Review Test

Revenue and expense record when it incured

• Accrual Basis

• Cash Basis

• Revenue Recognition

• Expense Recognition

Record Revenue when earned and measurable

• Accrual Basis

• Cash Basis

• Revenue Recognition

• Expense Recognition

Liability Account to Record Cash Received before revenues has been earned

• Unearned Revenue

• Sales Revenue

• Revenue Recognition

• Expense Recognition

Net Income =

• Liabilities + Shareholder Equity

• Revenue - Expense

• Cash Inflow - Cash Outflow

• Net Income-Deviden

Retained Earning =

• Liabilities + Shareholder Equity

• Revenue - Expense

• Cash Inflow - Cash Outflow

• Net Income-Deviden

Assets =

• Liabilities + Shareholder Equity

• Revenue - Expense

• Cash Inflow - Cash Outflow

• Net Income-Deviden

Net Cash Flow =

• Liabilities + Shareholder Equity

• Revenue - Expense

• Cash Inflow - Cash Outflow

• Net Income-Deviden

For each account listed below, classify whether it is an asset (A), liability (L), stockholders’ equity (SE), Revenue (R), Expenses (E) item. Additionally, indicate whether the account usually has a debit or credit balance.

• Liability (L), usually has a credit balance

• Inventory

• Asset (A), usually has a debit balance

• Account Payable

• Liability (L), usually has a credit balance

• Retained Earning

• Asset (A), usually has a debit balance

• Unearned Revenue

• Shareholder Equity (SE), usually debit

• Account Receivable

Which accounting method recognizes revenue when cash is received?

• Expense Recognition

• Accrual Basis

• Cash Basis

• Revenue Recognition

Which account is used to record expenses that have not been incurred but already paid?

• Accounts Payable

• Cash Basis

• Prepaid Expenses

• Accrued Expenses