LO 2-2 Receivables Affect Financial Statements

Question 1

accrual accounting measures

Answer 1

net income

Question 2

measuring net income gives us an idea of

Answer 2

how the company performed and how much the company made during the period (year)

Question 3

accrual accounting recognizes revenue when its ______ and expenses when they are _________

Answer 3

earned

incurred

Question 4

accrual means that a revenue or expense is recognized before cash is ________.

When services are provided

Answer 4

exchanged

Question 5

an asset source transaction does not affect the

Answer 5

income statement

Question 6

net income is how me measure

Answer 6

revenues and expenses

Question 7

normally we perform a service and we receive cash at the same time so this is revenue for what year?

Answer 7

Year 1

Question 8

accrual accounting accounts for cash when it is received in a _______ than when services are performed

Answer 8

different

Question 9

GAAP requires the use of

Answer 9

accrual accounting

Question 10

Accrual accounting recognizes revenue when services are exchanged, meaning in the

Answer 10

current period.