Chapter 5 Learning Objective 4

Question Title

* 1. The _______________ requires that revenue is recorded when it is received in cash and expenses are recorded when

accrual basis of accounting

cash basis of accounting

hybrid basis of accounting

GAAP basis of accounting

Question Title

* 2. The _______________ requires that revenue is recorded when earned and expenses are recorded when incurred.

accrual basis of accounting

cash basis of accounting

hybrid basis of accounting

GAAP basis of accounting

Question Title

* 3. Yellow Co. makes a sale to a customer in January but does not receive payment until March. Yellow Co. records the sale in January. Which method of accounting is Yellow Co. using?

accrual basis of accounting

cash basis of accounting

hybrid basis of accounting

consolidated basis of accounting

Question Title

* 4. Munoz Co. prepays cash in October for insurance that covers only the month of November. Munoz Co. records the expense in October. Which method of accounting is Munoz Co. using?

accrual basis of accounting

cash basis of accounting

hybrid basis of accounting

consolidated basis of accounting

Question Title

* 5. Baker Co. uses the accrual basis of accounting. Baker Co. prepays cash in May for insurance that covers only the month of June. Which of the following statements is true?

Baker Co. should record the insurance expense in May.

Baker Co. should record the insurance expense in June.

Baker Co. should record the payment of cash in June.

Baker Co. should neither record the payment of cash nor the insurance expense in May.

Question Title

* 6. Cox Co. uses the cash basis of accounting. Cox Co. receives cash from customers in September for services to be performed in November. Which of the following is true?

Cox Co. should record revenue in September and receipt of cash in November.

Cox Co. should record revenue in November and receipt of cash in September.

Cox Co. should record both the receipt of cash and revenue in November.

Cox Co. should record both the receipt of cash and revenue in September.

Question Title

* 1. The _______________ requires that revenue is recorded when it is received in cash and expenses are recorded when

Question Title

* 2. The _______________ requires that revenue is recorded when earned and expenses are recorded when incurred.

Question Title

* 3. Yellow Co. makes a sale to a customer in January but does not receive payment until March. Yellow Co. records the sale in January. Which method of accounting is Yellow Co. using?

Question Title

* 4. Munoz Co. prepays cash in October for insurance that covers only the month of November. Munoz Co. records the expense in October. Which method of accounting is Munoz Co. using?

Question Title

* 5. Baker Co. uses the accrual basis of accounting. Baker Co. prepays cash in May for insurance that covers only the month of June. Which of the following statements is true?

Question Title

* 6. Cox Co. uses the cash basis of accounting. Cox Co. receives cash from customers in September for services to be performed in November. Which of the following is true?﻿

* 6. Cox Co. uses the cash basis of accounting. Cox Co. receives cash from customers in September for services to be performed in November. Which of the following is true?