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Match the Following Definitions with the Terms

Question 258

Matching

Match the following definitions with the terms.

Premises:

Responses:

An exchange of value between two parties.

Revenue recognition principle

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.

Expenses

The cost of assets or services used to earn revenue.

Statement of cash flows

Creditor's claims on assets.

Business entity 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.

Statement of retained earnings

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.

Business transaction

The principle that revenue is recognized when earned.

Liabilities

Premises:

An exchange of value between two parties.

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.

The cost of assets or services used to earn revenue.

Creditor's claims on assets.

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.

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 revenue is recognized when earned.

Responses:

Revenue recognition principle

Accounting equation

Expenses

Statement of cash flows

Business entity principle

Statement of retained earnings

Monetary unit principle

Business transaction

Liabilities

Correct Answer:

Premises:

Responses:

An exchange of value between two parties.

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.

The cost of assets or services used to earn revenue.

Creditor's claims on assets.

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.

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 revenue is recognized when earned.