Solved

Match the Following Definitions with the Terms

Question 248

Matching

Match the following definitions with the terms. Place the number that identifies the best definition in the blank space next to the term.

Premises:

Responses:

Revenue recognition principle

A financial statement that reports the changes in retained earnings over the reporting period; adjusted for increases from net income and for decreases such as dividends or net loss.

Monetary unit principle

An exchange of value between two parties.

Business entity principle

The relation between a company's assets, liabilities and equity.

Liabilities

The cost of assets or services used to earn revenue.

Accounting equation

A financial statement that lists cash inflows (receipts) and cash outflows (payments); the cash flows are arranged by operating, investing, and financing activities.

Statement of cash flows

The principle that assumes transactions and events can be expressed in money units.

Statement of retained earnings

Creditor's claims on assets.

Expenses

The principle that revenue is recognized when earned.

Business transaction

The principle that requires a business to be accounted for separately from its owners.

Premises:

Revenue recognition principle

Monetary unit principle

Business entity principle

Liabilities

Accounting equation

Statement of cash flows

Statement of retained earnings

Expenses

Business transaction

Responses:

A financial statement that reports the changes in retained earnings over the reporting period; adjusted for increases from net income and for decreases such as dividends or net loss.

An exchange of value between two parties.

The relation between a company's assets, liabilities and equity.

The cost of assets or services used to earn revenue.

A financial statement that lists cash inflows (receipts) and cash outflows (payments); the cash flows are arranged by operating, investing, and financing activities.

The principle that assumes transactions and events can be expressed in money units.

Creditor's claims on assets.

The principle that revenue is recognized when earned.

The principle that requires a business to be accounted for separately from its owners.

Correct Answer:

Premises:

Responses:

Revenue recognition principle

Monetary unit principle

Business entity principle

Liabilities

Accounting equation