Professor Schmidt Is an Information-Processing Theorist

question 193

Multiple Choice

Professor Schmidt is an information-processing theorist. This means that he places particular emphasis on

• A) what changes occur.
• B) when change occurs.
• C) how change occurs.
• D) for whom change occurs.

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Definitions:

Cash Basis

An accounting method where revenues and expenses are recognized only when cash is received or paid, respectively.

Recorded When Incurred

An accounting principle that stipulates expenses should be recognized in the financial statements in the period they are incurred, regardless of when the cash payments are made.

Adjusting Entries

Journal entries made at the end of an accounting period to update account balances before financial statements are prepared.

Account Balances

The total amount of money in a financial account, calculated by adding all credits and subtracting all debits.