Accounting Ch 2

Which of the following is an asset​ account?

Accounts Receivable

Which of the following is true of accrual basis accounting and cash basis​ accounting?

Accrual accounting records revenue only when it is earned.

​________ represents a debt owed for renting a building currently

Rent Payable

Suppose on January 1 Andrew​'s Tavern prepaid rent of $16,800 for the full year. At March 31​, how much rent expense should be recorded for the period January 1 through March31​?

Suppose on January 1 Andrew​'s Tavern prepaid rent of $ $16,800 for the full year. At March 31​, how much rent expense should be recorded for the period January 1 through March 31​?

Considering your results from Requirement​ 2, which method gives the best picture of the true earnings of Cuisine ​Catering? Why?

The accrual basis gives the best picture of the true earnings of CuisineCuisine Catering because revenues are recorded when earned and expenses are recorded when incurred as dictated by the revenue recognition principle and the matching principle.

A payment of an expense in advance is called a prepaid expense.

True

Which of the following accounts is a​ liability

Unearned Revenue

Amounts earned from delivering goods or services to customers are called​ ________.

revenues