Accounting 1 Chapter 4

Accrued revenues are revenues that have been received but not yet earned.

False

An adjusting entry would be made to the revenue account only when cash is received.

False

Income will always be greater under the cash basis of accounting than under the accrual basis of accounting.

False

Revenue received before it is earned and expenses paid before being used or consumed are both initially recorded as liabilities.

False

The revenue recognition principle dictates that revenue be recognized in the accounting period in which it is earned

True

Accrued revenues are revenues are revenues that have been earned but not yet recorded.

True

Adjusting entries are often made because some business events are not recorded as they occur.

True

An adjusting entry to a prepaid expense is required to recognize expired expenses.

True

Expense recognition is tied to revenue recognition.

True

Recognizing when an expense contributes to the production of revenue is critical.

True

Revenue received before it is earned and expenses used or consumed before being paid are both initially recorded as liabilities.

True

The cash basis of accounting is not in accordance with generally accepted accounting principles.

True

The expense recognition principle is frequently referred to as the matching principle.

True