Ch 6 Study Guide - Review the Facts Chapter 6 A. Reality...

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Review the Facts – Chapter 6 A . Reality refers to the true amount whereas the measurement of reality is the recording of an amount which intends to represent the true amount. Reality is the fact that I believe my bank account has $2,000, but the measurement of reality proves that the account has only $1,500. B. The problem of periodic measurement includes the discrepancies between reality and measurement when earnings are measured for a specific time period. C. The term recognition in accounting means to record in the books and to report on the financial statements. D. The term realization is defined as the actual receipt of cash or the payment of cash. E. Under the cash basis revenues are recognized when the cash is received and the receipt relates to producing goods, rendering services, or other business activities. F. Under the cash basis expenses are recognized when the cash is paid in relation to paying for goods or services.
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This note was uploaded on 09/16/2011 for the course ACCT 2113 taught by Professor Staff during the Fall '11 term at University of Central Oklahoma.

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Ch 6 Study Guide - Review the Facts Chapter 6 A. Reality...

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