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