ACCT 1100 CHAPTER 3 EXAM QUESTIONS WITH VERIFIED SOLUTIONS LATEST UPDATE 2026
accounting period concept - Answers Requires that revenues & expenses be reported in the proper
period
accrual basis of accounting - Answers reporting income when it is earned and expenses when they
are incurred
revenue recognition concept - Answers the accounting concept supporting this reporting of revenues
Revenue Recognition - Answers formal recording and reporting of revenues at the appropriate time
matching concept - Answers the accounting concept supporting reporting revenues and related
expenses in the same period
Cash Basis Accounting - Answers Records revenues when cash is received and expenses when cash is
paid
Adjusting process - Answers The analysis & updating of accounts at the end of the period before the
financial statements are prepared
adjusting entries - Answers The journal entries that bring the accounts up to date at the end of the
accounting period.
Prepaid expenses - Answers Expenses paid in cash before they are used or consumed
Unearned Revenues - Answers Cash received and recorded as liabilities before revenue is earned
Accrued Revenue - Answers A revenue that has been earned but for which the cash has not yet been
collected.
Accrued expenses - Answers Expenses incurred but not yet paid in cash or recorded.
fixed assets - Answers assets that are relatively permanent, such as land, buildings, and equipment
plant assets - Answers physical assets that will be used for a number of years in the operation of a
business
Depreciation - Answers Decrease in value
depreciate (v) - Answers to reduce in value
Accumulated Depreciation - Answers The total amount of depreciation expense that has been
recorded since the purchase of a plant asset.
contra account - Answers an account with a balance that is opposite to that of its related accounts
contra asset account - Answers offsets an asset account on the balance sheet
book values - Answers value of assets or liabilities according to the balance sheet
adjusted trial balance - Answers a list of accounts and their balances after all adjustments have been
made
vertical balance - Answers the elements at the top and bottom of the composition are in balance
accounting period concept - Answers Requires that revenues & expenses be reported in the proper
period
accrual basis of accounting - Answers reporting income when it is earned and expenses when they
are incurred
revenue recognition concept - Answers the accounting concept supporting this reporting of revenues
Revenue Recognition - Answers formal recording and reporting of revenues at the appropriate time
matching concept - Answers the accounting concept supporting reporting revenues and related
expenses in the same period
Cash Basis Accounting - Answers Records revenues when cash is received and expenses when cash is
paid
Adjusting process - Answers The analysis & updating of accounts at the end of the period before the
financial statements are prepared
adjusting entries - Answers The journal entries that bring the accounts up to date at the end of the
accounting period.
Prepaid expenses - Answers Expenses paid in cash before they are used or consumed
Unearned Revenues - Answers Cash received and recorded as liabilities before revenue is earned
Accrued Revenue - Answers A revenue that has been earned but for which the cash has not yet been
collected.
Accrued expenses - Answers Expenses incurred but not yet paid in cash or recorded.
fixed assets - Answers assets that are relatively permanent, such as land, buildings, and equipment
plant assets - Answers physical assets that will be used for a number of years in the operation of a
business
Depreciation - Answers Decrease in value
depreciate (v) - Answers to reduce in value
Accumulated Depreciation - Answers The total amount of depreciation expense that has been
recorded since the purchase of a plant asset.
contra account - Answers an account with a balance that is opposite to that of its related accounts
contra asset account - Answers offsets an asset account on the balance sheet
book values - Answers value of assets or liabilities according to the balance sheet
adjusted trial balance - Answers a list of accounts and their balances after all adjustments have been
made
vertical balance - Answers the elements at the top and bottom of the composition are in balance
