Cash basis of accounting
Cash basis of accounting refers to the recognition of financial transactions only when the cash is received or paid.
Fiscal year
The fiscal year refers to the accounting period of 1 year, which may not be the usual calendar year (starts from January, 1 to December, 31), used by the business entities for accounting purpose. This fiscal year varies differently for different countries.
The revenue recognition principle
The revenue recognition principle refers to the revenue that should be recognized in the time period, when the performance obligation (sales or services) of the company is completed.
The expense recognition principle
The expense recognition principle refers to the expenses that should match with revenue (matching principle) in the period when the company incurred expenses in order to generate the revenue.
To match: The given concepts with the descriptions.
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Chapter 4 Solutions
FINANCIAL ACCOUNTING
- Solve this financial accounting problemarrow_forwardWhat is the company's dividend payout ratio of this financial accounting question?arrow_forwardDuring November, 10,000 units were produced. The standard quantity of material allowed per unit was 12 pounds at a standard cost of $4 per pound. If there was an unfavorable usage variance of $25,020 for November, what amount must be the actual quantity of materials used?arrow_forward
- Hello teacher give me solutionarrow_forwardZendta Corporation, a firm with no net debt, reports cash flow from operations of $5,120 million in its cash flow statement after adding $1,750 million in accruals to earnings. It reported cash investments in operations of $3,025 million. What were Zendta Corporation's free cash flow and earnings for the period?arrow_forwardHow will net income be affected for this financial accounting question?arrow_forward
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
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