Reporting Revenues When They Are Earned and Expenses When They

question 163

Multiple Choice

Reporting revenues when they are earned and expenses when they are incurred is called ________ basis accounting.

• A)accrual
• B)cash
• C)expense recognition
• D)cost

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Definitions:

Other Comprehensive Income

This encompasses earnings, revenues, expenses, and gains or losses that are not included in net income, reflecting the total non-owner changes in equity.

Accrued/Prepaid Pension Cost

Expenses related to pension plans that have been incurred but not yet paid, or payments made in advance for future pension costs.

Defined Benefit Pension Plan

A retirement plan where employee benefits are calculated using a formula considering factors like salary history and duration of employment.