Income Management

Question 1

The accounting process whereby revenues are measured and recorded as earned, while expenses are recorded as incurred

Answer 1

accrual basis

Question 2

Unpaid expenses that have already been incurred

Answer 2

accrued expenses

Question 3

Revenues that have been earned and recorded, but are not as yet collected

Answer 3

accrued revenues

Question 4

A trial balance prepared after adjusting entries have been prepared and posted to the ledger

Answer 4

adjusted trial balance

Question 5

Cost minus accumulated depreciation; the net amount at which an asset is reported on the balance sheet

Answer 5

book value

Question 6

The process used to allocate the cost of a long-lived property to the accounting periods benefited

Answer 6

depreciation

Question 7

To associate expenses with revenues, and record them in simultaneous accounting periods

Answer 7

matching principle

Question 8

An accounting assumption that purports to divide a continuous business process into measurement intervals, such as months, quarters, and years

Answer 8

periodicity assumption

Question 9

Goods or services purchased in advance of their consumption

Answer 9

prepaid expenses

Question 10

The point at which revenue is recognized in the accounting records; ordinarily the point of sale

Answer 10

revenue recognition

Question 11

Revenue that has been collected in advance of providing goods and services to “earn it;” reported as a liability until earned

Answer 11

unearned revenue