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 ?