Which of the following statements about income and expense recognition is true? I. The gross profit on sales computed under modified cash basis is the same as that computed under accrual basis Both cash basis and modified cash basis will yield the same amount of operating II. expenses in the income statement In recording day-to-day transactions and events, all entities must follow accrual basis of accounting III. A. Only I is true B. II and III are true C. I and II are true D. All statements are true

Which of the following statements about income and expense recognition is true? I. The gross profit on sales computed under modified cash basis is the same as that computed under accrual basis Both cash basis and modified cash basis will yield the same amount of operating II. expenses in the income statement In recording day-to-day transactions and events, all entities must follow accrual basis of accounting III. A. Only I is true B. II and III are true C. I and II are true D. All statements are true

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter3: Accrual Accounting

Section: Chapter Questions

Problem 1MCQ: Which of the following statements is true? Under cash-basis accounting, revenues are recorded when a...

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Which of the following statements is true? Under cash-basis accounting, revenues are recorded when a company satisfies its performance obligations and expenses are recorded when incurred. Accrual-basis accounting records both cash and noncash transactions when they occur. Generally accepted accounting principles require companies to use cash-basis accounting. The key elements of accrual-basis accounting are the revenue recognition principle, the expense recognition principle, and the historical cost principle.
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do not copy which of the following is an accounting concept which serves as the basis for revenue and expense recognition : A- the time period assumption b- the matching convention c- the cash basis of accounting d- the entity principal
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1. Multiple-Choice Question Under the accrual basis of accounting, revenues are reported in the accounting period when which of the following occurs? A. Cash Is Received B. Services Or Goods Have Been Delivered Please explain, and add example if can.
Which of the following accounting principles prescribes that a company record its ex- penses incurred to generate the revenue reported? A) Going-concern assumption. B) Expense recognition (Matching) principle. C) Measurement (Cost) principle. D) Business entity assumption. E) Consideration assumption.
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