Which one of the following statements is true a

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Accounting Using Excel for Success
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Chapter 3 / Exercise 8
Accounting Using Excel for Success
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61. Which one of the following statements is true? a. Accruals are adjustments that are recorded prior to the associated cash flow taking place. b. Cash is used in the accrual process. c. Accrual accounting recognizes revenues and expenses based on current period cash flows. d. Accrual accounting may use either two asset or two liability accounts. Ans: A KP 5 BT: C Difficulty: Moderate TOT: 2 min. AACSB: Analytic AICPA BB: Critical Thinking AICPA FN: Reporting
62. Which one of the following is a required characteristic of accruals and deferrals?
AICPA BB: Critical Thinking AICPA FN: Reporting 63. The main purpose of the adjusting process is
AICPA BB: Critical Thinking AICPA FN: Reporting
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Accounting Using Excel for Success
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Chapter 3 / Exercise 8
Accounting Using Excel for Success
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4- 16 Test Bank – Chapter 4 – The Mechanics of Financial Accounting 64. The biggest distinction between accruals and deferrals is
AICPA BB: Critical Thinking AICPA FN: Reporting 65. Closing entries result in net income being transferred to a. a revenue account. b. the cash account. b. the contributed capital account. d. the retained earnings account. Ans: D KP 2 BT: K Difficulty: Easy TOT: 1 min. AACSB: Analytic
AICPA BB: Critical Thinking AICPA FN: Reporting

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