In Making Decisions, Management Considers Only Financial Information Because Accounting

question 91

True/False

In making decisions, management considers only financial information because accounting is presented in financial context.

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Definitions:

Temporary Accounts

Accounts used to collect revenues, expenses, and dividends information which are then transferred to permanent accounts at the end of the accounting period.

Closed

Refers to an account or period that has been concluded and no longer accepts entries or transactions.

Accrual Basis

An accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when the cash is exchanged.

Adjusting Entries

Journal entries made in the accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.