Match the Following Terms with the Appropriate Definition

question 420

Multiple Choice

Match the following terms with the appropriate definition.
-The accounting system that uses the adjusting process to recognize revenues when earned and expenses when incurred.

• A)Accrued revenues
• B)Expense recognition (matching) principle
• C)Cash basis accounting
• D)Depreciation
• E)Accrual basis accounting
• F)Interim financial statements
• G)Straight-line depreciation
• H)Time period assumption
• I)Fiscal year

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Definitions:

Comparative Income Statement

A financial statement that compares income over multiple periods to identify trends and growth patterns.

Discontinued Component

A segment or unit of a business that has been sold off, ceased operations, or is classified as held for sale, and is reported separately in the financial statements.

Gross Profit

The difference between revenue and the cost of goods sold (COGS), indicating how much a company earns from its core business activities.

Multiple-Step Income Statement

A comprehensive income statement that separates operating revenues and expenses from non-operating ones, providing a detailed view of a company's financial activities.