Accrual Accounting Mastery Quiz
Accrual Accounting Mastery Quiz
Test your knowledge on accrual accounting principles with our engaging quiz designed for students and professionals alike. Dive deep into the fundamentals of matching expenses with revenues and uncover the intricacies of financial reporting.
- 15 Questions covering essential concepts
- Understand accrual versus cash basis accounting
- Perfect for anyone looking to enhance their financial literacy
The first step in the accrual matching process is:
A. To determine which expenses helped to generate specific revenue
B. To determine in which income statement period a company should recognize a particular revenue
C. To match those expenses paid in the same period with the revenues received in cash during the same period
D. To recognize only those expenses actually paid in the same period as the revenue they helped to generate
The basic approach(es) to recording economic activity is(are):
A.The true net income basis
B.The cash basis and the accrual basis
C.The cash basis
D.The accrual basis
Which item below is considered an expense on the income statement under the cash basis?
A.A dividend paid in cash to stockholders
B.A liability incurred to pay employee wages
C.Depreciation expense
D.Buying copy paper for cash from a local office supply store
Reality and the measurement of reality are not the same thing. Which activity listed below is not an actual business event but a measurement of an actual business event?
A.Paying employees
B.Purchasing inventory
C.Recording a check in the check register
D.Providing services
For the month of January, the Cold Storage Company paid its employees $11,000 in wages. Cold Storage owes its employees $2,500 for work done during January which has not yet been paid. Under accrual accounting, Cold Storage’s wage expense for January is:
A.$2,500
B.$4,000
C.$13,500
D.$11,000
He accounting principle that relates the expenses to the revenues for a particular income statement period is known as the:
A.Realization principle
B.Recognition principle
C.Depreciation principle
D.Matching principle
A weakness of the accrual basis accounting system is that it takes the focus off of:
A.Stock
B.Inventory
C.Notes payable
D.Checks
Accrual accounting focuses on the:
A.Earnings process
B.Legal considerations of the business entity
C.Articulation of the financial statements
D.Cash flows of the business
From the seller’s standpoint, an example of money that is owed to a business from a legally enforceable claim for goods or services provided is:
A.a receivable
B.Cash
C.Answers b and d are both correct.
D.Inventory
Under accrual accounting we recognize revenue when it is:
A.Received, no matter when it is earned
B.Earned, as long as payment for it occurs in the same time period
C.Earned, no matter when payment for it is received
D.Received, as long as payment for it occurs in the same time period
A situation where the cash has either been received or paid, but the income statement effect is delayed until a later period is a(n):
A.Deferral
B.Error
C.Realization
D.Accrual
Which financial statement's structure is closest to that of the basic accounting equation?
A.Balance Sheet
B.Income Statement
C.Statement Of Cash Flows
D.Statement Of Comprehensive Income
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