ACCT 2000 LOWE ARDOIN 2 FINAL PAPER UPDATED SCRIPT PREMIUM QUESTIONS AND PREMIUM SOLUTIONS FULLY REVIEWED

ACCT 2000 LOWE ARDOIN 2 FINAL
PAPER UPDATED SCRIPT PREMIUM
QUESTIONS AND PREMIUM SOLUTIONS
FULLY REVIEWED

⩥ Revenue Recognition Principle.
Answer: companies recognize revenue in the accounting period in which
it is earned


⩥ Expense Recognition Principle.
Answer: Expenses are matched with revenues in the period when efforts
are expended to generate revenues


⩥ Accrual-Basis Accounting.
Answer: - transactions recorded in the periods in which the events occur
- revenues are recognized when earned, even if cash was not received
- Expenses are recognized when incurred, even if cash was not paid


⩥ Cash-Basis Accounting.
Answer: - Revenues are recognized only when cash is received
- expenses are recognized only when cash is paid
- Not allowed under generally accepted accounting principles

, ⩥ Adjusting entries make it possible to.
Answer: report correct amounts on the balance sheet and on the income
statement


⩥ A company makes adjusting entries when?.
Answer: every time they prepare financial statements


⩥ Adjusting entires include.
Answer: one income statement account and one balance sheet account


⩥ When doing adjusting entires you must make sure which rules are
followed?.
Answer: revenue and expense principles


⩥ Prepaid expenses.
Answer: expenses paid in cash and recorded as assets before they are
used or consumed


⩥ Unearned revenue.
Answer: cash received and reported as liabilities before revenue is
earned