WorksheetsPost Test TTM 3
Total questions: 15
Worksheet time: 13mins
The time period assumption is also referred to as the
calendar assumption
cyclicity assumption
periodicity assumption
fiscal assumption
Adjustments would not be necessary if financial statements were prepared to reflect net income from
monthly operations
fiscal year operations
interim operations
lifetime operations
The revenue recognition principle dictates that revenue should be recognized in the accounting records
when cash is received
when the performance obligation is satisfied
at the end of the month
in the period that income taxes are paid
In a service-type business, revenue is considered earned
at the end of the month
at the end of the year
when the service is performed
when cash is received
The expense recognition principle matches
customers with businesses
expenses with revenues
assets with liabilities
creditors with businesses
Adjusting entries are required
yearly
quarterly
monthly
every time financial statements are prepared
Adjusting entries can be classified as
postponements and advances
accruals and deferrals
deferrals and postponements
accruals and advances
Adjusting entries are
not necessary if the accounting system is operating properly
usually required before financial statements are prepared
made whenever management desires to change an account balance
made to statement of financial position accounts only.
Expenses incurred but not yet paid or recorded are called
prepaid expenses
accrued expenses
interim expenses
unearned expenses
Accrued revenues are
received and recorded as liabilities before they are earned
earned and recorded as liabilities before they are received
earned but not yet received or recorded
earned and already received and recorded
Prepaid expenses are
paid and recorded in an asset account before they are used or consumed
paid and recorded in an asset account after they are used or consumed
incurred but not yet paid or recorded
incurred and already paid or recorded
Accrued expenses are
paid and recorded in an asset account before they are used or consumed
paid and recorded in an asset account after they are used or consumed
incurred but not yet paid or recorded
incurred and already paid or recorded
Unearned revenues are
received and recorded as liabilities before they are earned
earned and recorded as liabilities before they are received
earned but not yet received or recorded
earned and already received and recorded
A liability—revenue relationship exists with
prepaid expense adjusting entries
accrued expense adjusting entries
unearned revenue adjusting entries
accrued revenue adjusting entries
Unearned revenue is classified as
an asset account
a revenue account
a contra-revenue account
a liability account
