CH2_LO5-9

Question 1

An accounting system that recognizes expenses or revenues when they occur regardless of when cash is exchanged.

Answer 1

accrual accounting

Question 2

Recognition of events before exchanging cash.

Answer 2

accrual

Question 3

Recognition of cash logged before expense.

Answer 3

deferral

Question 4

An amount paid to acquire a resource (asset) or to pay for a resource that has been consumed. Incurring a cost results in an asset exchange or expense recognition.

Answer 4

cost

Question 5

Deferred expenses. An example is prepaid insurance.

Answer 5

prepaid items

Question 6

Liability arises when customers pay cash in advance for services a business will perform in the future.

Answer 6

unearned revenue

Question 7

The economic benefit (increase in assets or decrease in liabilities) gained by providing goods or services to customers.

Answer 7

revenue

Question 8

Concurrent representation of several financial statements shown vertically on a page.

Answer 8

vertical statements model

Question 9

On the statement of cash flows, issuing stock for cash increases cash flow from ______ activities.

Answer 9

financing