MBA 700: Module 2 Exam Questions and
Answers 100% Pass
accrual basis accounting -
CORRECT ANSWER: transactions are generally recorded in the
financial statement when the transactions occur, and not when paid,
although in
some situations the two events could happen on the same day
QUESTION: time period concept -
CORRECT ANSWER: assumes that a business's activities can be sliced
into small time segments and that financial statements can be prepared
for specific periods, such as a month, quarter, or year
QUESTION: adjusting entry concept -
,CORRECT ANSWER: ensures accurate financial statements by
reflecting income and expenses accurately in the period they are earned
or incurred, regardless of when cash is received or paid
QUESTION: when are adjusting entries are completed? -
CORRECT ANSWER: - made at the end of an accounting period
- ensure that the financial statements accurately reflect the company's
financial position and performance
QUESTION: economic entity concept -
CORRECT ANSWER: - it emphasizes that a business entity is separate
and distinct from its owners, investors, or any other entities
- financial activities of the business must be recorded and reported
separately from those of its owners or any other organizations
QUESTION: matching principle (aka expense recognition) -
CORRECT ANSWER: - accrual accounting
, - requires companies to match revenues generated with related expenses
in the period in which they are incurred
regardless of when the actual cash is received or paid
- affects accounts: insurance expense and supplies expense
QUESTION: revenue recognition principle -
CORRECT ANSWER: - adjusting entries are necessary because the
revenue recognition principle requires revenue recognition when earned
- need to update to unearned revenues
QUESTION: matching principle helps to match -
CORRECT ANSWER: - expenses and revenues
QUESTION: supplies expense formula -
CORRECT ANSWER: Beginning balance + Purchases - Ending
balance = Supplies used
Answers 100% Pass
accrual basis accounting -
CORRECT ANSWER: transactions are generally recorded in the
financial statement when the transactions occur, and not when paid,
although in
some situations the two events could happen on the same day
QUESTION: time period concept -
CORRECT ANSWER: assumes that a business's activities can be sliced
into small time segments and that financial statements can be prepared
for specific periods, such as a month, quarter, or year
QUESTION: adjusting entry concept -
,CORRECT ANSWER: ensures accurate financial statements by
reflecting income and expenses accurately in the period they are earned
or incurred, regardless of when cash is received or paid
QUESTION: when are adjusting entries are completed? -
CORRECT ANSWER: - made at the end of an accounting period
- ensure that the financial statements accurately reflect the company's
financial position and performance
QUESTION: economic entity concept -
CORRECT ANSWER: - it emphasizes that a business entity is separate
and distinct from its owners, investors, or any other entities
- financial activities of the business must be recorded and reported
separately from those of its owners or any other organizations
QUESTION: matching principle (aka expense recognition) -
CORRECT ANSWER: - accrual accounting
, - requires companies to match revenues generated with related expenses
in the period in which they are incurred
regardless of when the actual cash is received or paid
- affects accounts: insurance expense and supplies expense
QUESTION: revenue recognition principle -
CORRECT ANSWER: - adjusting entries are necessary because the
revenue recognition principle requires revenue recognition when earned
- need to update to unearned revenues
QUESTION: matching principle helps to match -
CORRECT ANSWER: - expenses and revenues
QUESTION: supplies expense formula -
CORRECT ANSWER: Beginning balance + Purchases - Ending
balance = Supplies used
