301exam7reviewKEY - EXAM #7 REVIEW The answers to the...

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EXAM #7 REVIEW The answers to the questions below will be gone over in class Thursday, December 10 th and then posted on my webpage after class on Thursday. 1. Use of the same accounting principles and methods from year to year within a company is called Consistency 2. The monetary unit assumption states that only transactions that can be measured in terms of money should be recorded in the accounting records. a. True b. False 3. The time period assumption states that the business will remain in operation for the foreseeable future. One-year reporting periods a. True b. False 4. What Assumption of accounting would require that you keep two sets of books & records in total, one for each company, when you own and operate two different companies? Separate entity 5. The matching principle states that expenses should be matched with revenues. Another way of stating the principle is to say that a. assets should be matched with liabilities. b. efforts should be matched with accomplishments. c. dividends should be matched with stockholder investments. d. cash payments should be matched with cash receipts. 6. The revenue recognition principle dictates that revenue should be recognized in the accounting period it is Earned – service performed or product delivered 7. Jim’s Tune-up Shop follows the revenue recognition principle. Jim finished repairing a car on July 31. The customer picked up the vehicle on August 1 and mailed the payment to Jim on August 5. Jim received the check in the mail on August 6. What date should Jim show that the revenue was earned? July 31 when the service was performed and completed 8. Depreciation is a process of a. asset devaluation. b. cost accumulation. c. cost allocation. Spread the cost over the years of benefit to the company
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This note was uploaded on 12/14/2010 for the course BUS 3103 taught by Professor Nugent during the Spring '09 term at Texas Woman's University.

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301exam7reviewKEY - EXAM #7 REVIEW The answers to the...

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