25 May Question TRUE/FALSE 1. Because accounting often requires estimates to be made to assess the effect of a transaction, the shorter the time period, the easier it becomes to determine the proper adjustments.
Question
TRUE/FALSE
1. Because accounting often requires estimates to be made to assess the effect of a transaction, the shorter the time period, the easier it becomes to determine the proper adjustments.
2. The time period assumption states that the economic life of a business entity can be divided into artificial time periods.
3. The time period assumption is often referred to as the matching principle.
4. A company’s calendar year and fiscal year are always the same.
5. Accounting time periods that are one year in length are referred to as interim periods.
6. Income will always be greater under the cash basis of accounting than under the accrual basis of accounting.
7. The cash basis of accounting is not in accordance with generally accepted accounting principles.
8. The matching principle requires that assets be matched with liabilities.
9. Accrual basis accounting requires that expenses be recognized when incurred regardless of when paid.
10. The revenue recognition principle dictates that revenue be recognized in the accounting period in which cash is received.
Multiple Choice Questions
11. Monthly and quarterly time periods are called
12. The time period assumption states that
13. Adjustments would not be necessary if financial statements were prepared to reflect net income from
14. Management usually desires ________ financial statements and the IRS requires all businesses to file _________ tax returns.
15. Which of the following are in accordance with generally accepted accounting principles?
16. Joe’s Tune-up Shop follows the revenue recognition principle. Jim services a car on July 31. The customer picks up the vehicle on August 1 and mails the payment to Jim on August 5. Jim receives the check in the mail on August 6. When should Jim show that the revenue was earned?
17. Adjusting entries are
18. Faraway Beltway Company pays weekly salaries for a 5-day week of $2,000
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