Solved

Match the Following Definitions with the Terms Place the Letter

Question 237

Matching

Match the following definitions with the terms Place the letter that identifies the best definition to the term.

Premises:

Responses:

Revenue recognition principle

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

Monetary unit principle

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

Statement of owner's equity

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

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.

Liabilities

An exchange of value between two parties.

Business entity principle

A financial statement that reports the changes in equity over the reporting period; adjusted for increases such as owner investment and net income and for decreases such as owner withdrawals or net loss.

Expenses

Creditor's claims on assets.

Business transaction

The cost of assets or services used to earn revenue.

Statement of cash flows

The principle that revenue is recognized when earned.

Premises:

Revenue recognition principle

Monetary unit principle

Statement of owner's equity

Accounting equation

Liabilities

Business entity principle

Expenses

Business transaction

Statement of cash flows

Responses:

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

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

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

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

An exchange of value between two parties.

Creditor's claims on assets.

The cost of assets or services used to earn revenue.

The principle that revenue is recognized when earned.

Correct Answer:

Premises:

Responses:

Revenue recognition principle

Monetary unit principle

Statement of owner's equity

Accounting equation

Liabilities