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:

Positive

Expressing or implying affirmation, agreement, or permission; in economics, may refer to aspects such as positive externalities or positive growth rates.

Decreasing

Refers to a situation where a quantity or level is going down or diminishing over time.

Positive

A term often used in economics and finance to denote values or changes that signify growth, improvement, or gains.

Decreasing

A trend or process of becoming less in size, amount, number, or degree.