CH 3
To complete the measurement process, companies need to update balances of assets, liabilities, revenues and expenses for changes created by ____ entries.
adjusting
Revenue in the income statement for the year ended December 31, 2021 equals the:
amount earned by selling goods or services to customers during 2021
____ is the amount earned from selling goods or services to customers.
revenue
Reporting revenues only when cash is received and expenses only when cash is paid is called the _____ basis of accounting.
cash
Adjusting entries are made at the ____ of the accounting period, while daily transactions are made throughout the accounting period.
end
Adjusting entries help to ensure that all ____ are recorded in the period in which they are incurred.
expenses
A classified balance sheet ______.
groups asset and liabilities into current and long-term categories
Consistent with accrual-basis accounting, expenses should be recognized
in the period when the related revenue is generated
Under the accrual basis of accounting, costs used to generate revenue are recorded as expenses:
in the same period as related revenue
Revenues and expenses are reported in the:
income statement
The two major categories reported in the income statement are:
revenue, expense
The statement of stockholders' equity includes these amounts:
net income, dividends for the period, ending balance retained earnings
Adam Corporation uses the cash-basis of accounting. Adam Corporation should record expenses when:
paid
At year-end, companies that utilize accrual-based accounting systems complete the measurement process through
recording of adjusting entries