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