Solved

Match Each Term to Its Definition

Question 275

Matching

Match each term to its definition

Premises:

Responses:

Monetary unit principle

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

Expenses

An exchange of value between two parties.

Statement of retained earnings

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

Business entity principle

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

Statement of cash flows

The principle that revenue is recognized when earned.

Liabilities

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

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.

Business transaction

The cost of assets or services used to earn revenue.

Accounting equation

Creditor's claims on assets.

Premises:

Monetary unit principle

Expenses

Statement of retained earnings

Business entity principle

Statement of cash flows

Liabilities

Revenue recognition principle

Business transaction

Accounting equation

Responses:

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.

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

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

The principle that revenue is recognized when earned.

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

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 cost of assets or services used to earn revenue.

Creditor's claims on assets.

Correct Answer:

Premises:

Responses:

Monetary unit principle

Expenses

Statement of retained earnings

Business entity principle

Statement of cash flows

Liabilities

Revenue recognition principle