APEC 1251 – Exam 2 (Gary Cooper, UMN) – Agricultural and Applied
Economics – study material
The principle which holds that all of the expenses incurred in earning revenue should be identified with
the revenue recognized and reported for the same period as the - correct answer ✔✔matching
principle
The amount of revenue recognized in the income statement by a company that sells goods to customers
would be - correct answer ✔✔total sales, both cash and credit sales, for the period.
If a company records sales revenue - correct answer ✔✔expenses will increase
Financial analysts look tot he income statement to determine - correct answer ✔✔whether the
company has generated income from operations
A company would report a net loss when - correct answer ✔✔its expenses exceed its revenues for an
accounting period
which of the following is true about the time period assumption - correct answer ✔✔it assumes we
divide the long life of a business into a series of shorter time periods for accounting and reporting
purposes
the owner of an office should report rent collected in advance as a debit to cash and a credit to - correct
answer ✔✔a liability
Revenue is always recognized when - correct answer ✔✔it is earned
Which of the following is not one of the four criteria that normally must be met for revenue to be
recognized accounting to the revenue realization principle of accrual basis accounting? - correct answer
✔✔cash has been collected.
Economics – study material
The principle which holds that all of the expenses incurred in earning revenue should be identified with
the revenue recognized and reported for the same period as the - correct answer ✔✔matching
principle
The amount of revenue recognized in the income statement by a company that sells goods to customers
would be - correct answer ✔✔total sales, both cash and credit sales, for the period.
If a company records sales revenue - correct answer ✔✔expenses will increase
Financial analysts look tot he income statement to determine - correct answer ✔✔whether the
company has generated income from operations
A company would report a net loss when - correct answer ✔✔its expenses exceed its revenues for an
accounting period
which of the following is true about the time period assumption - correct answer ✔✔it assumes we
divide the long life of a business into a series of shorter time periods for accounting and reporting
purposes
the owner of an office should report rent collected in advance as a debit to cash and a credit to - correct
answer ✔✔a liability
Revenue is always recognized when - correct answer ✔✔it is earned
Which of the following is not one of the four criteria that normally must be met for revenue to be
recognized accounting to the revenue realization principle of accrual basis accounting? - correct answer
✔✔cash has been collected.
