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Chapter 4 Quiz
Question 1
The revenue recognition principle dictates that revenue be recognized
in the accounting period in which the performance obligation is
satisfied.
Question 2
An adjusting entry to a prepaid expense is required to recognize
expired expenses.
Question 3
Unearned revenue is a prepayment that requires an adjusting entry
when services are performed.
· Question 4
When closing entries are prepared, each income statement account is
closed directly to retained earnings.
· Question 5
The accounting cycle begins with the journalizing of the transactions
· Question 6
Management usually wants ________ financial statements and the
IRS requires all businesses to file _________ tax returns.
· Question 7
A flower shop makes a large sale for $1,000 on November 30. The
customer is sent a statement on December 5 and a check is received on
December 10. The flower shop follows GAAP and applies the revenue
recognition principle. When is the $1,000 considered to be recognized?
· Question 8
Which statement is correct?
· Question 9