The Approach to Preparing Financial Statements Based on Recognizing Revenues

question 149

Multiple Choice

The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is:

• A) Cash basis accounting.
• B) The matching principle.
• C) The time period assumption.
• D) Accrual basis accounting.
• E) Revenue basis accounting.

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Definitions:

Waste Product

A material that is not needed and is discarded after a manufacturing process or metabolic activity.

Carbon Dioxide

A colorless, odorless gas (CO2) produced by burning carbon and organic compounds and by respiration, absorbed by plants in photosynthesis.

Hemoglobin

A protein found in red blood cells responsible for transporting oxygen from the lungs to the rest of the body and returning carbon dioxide back to the lungs.

CO

Carbon monoxide, a colorless, odorless gas formed by incomplete combustion of carbon-containing materials, toxic to humans and animals when inhaled.