Chapter 3

Question 1

Define a calendar year

Answer 1

12 months, ends Dec 31

Question 2

Accural basis acc

Answer 2

Accounting system that recognizes revenues when goods or services are provided and expenses when incurred; the basis for GAAP. (

Question 3

In acurred acc.

Answer 3

Expenses are always recognized in the period in which they are incurred.

Revenues are always recorded in the period in which they are earned.

Comparability of financial statements is improved.

Question 4

Describe the expense recognition principle

Answer 4

Expenses should be matched in the same accounting period as the revenues that are recognized as a result of those expenses.

Matching of expenses with revenues is a major part of the adjusting process.