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11.Acompany'sfiscalyearmustcorrespondwiththecalendaryear.2.Thetimeperiodprincipleassumesthatanorganization'sactivitiescanbedividedintospecifictimeperiods.3.Interimstatementsreportacompany'sbusinessactivitiesfora1-yearperiod.4.Afiscalyearreferstoanorganization'saccountingperiodthatspanstwelveconsecutivemonthsor52weeks.5.Adjustingentriesaremadeafterthepreparationoffinancialstatements.6.Adjustingentriesresultinabettermatchingofrevenuesandexpensesfortheperiod.7.Twomainaccountingprinciplesusedinaccrualaccountingarematchingandfullclosure.8.Adjustingentriesareusedtobringassetorliabilityaccountstotheirproperamountandupdatetherelatedexpenseorrevenueaccount.9.Thematchingprinciplerequiresthatrevenuenotbeassignedtotheaccountingperiodinwhichitisearned.10.Therevenuerecognitionprincipleisthebasisformakingadjustingentriesthatpertaintounearnedandaccruedrevenues.11.Thecashbasisofaccountingcommonlyresultsinfinancialstatementsthatarenotcomparablefromperiodtoperiod.12.Underthecashbasisofaccounting,noadjustmentsaremadeforprepaid,unearned,andaccrueditems.13.Sincetherevenuerecognitionprinciplerequiresthatrevenuesbeearned,therearenounearnedrevenuesinaccrualaccounting.14.Thematchingprinciplerequiresthatexpensesgetrecordedinthesameaccountingperiodastherevenuesthatareearnedasaresultoftheexpenses,notwhencashispaid.15.Thecashbasisofaccountingisanaccountingsysteminwhichrevenuesarereportedwhencashisreceivedandexpensesarereportedwhencashispaid.216.Thecashbasisofaccountingrecognizesrevenueswhencashpaymentsfromcustomersarereceived.17.Theaccrualbasisofaccountingrecognizesrevenueswhencashisreceivedfromcustomers.18.Theaccrualbasisofaccountingrecognizedexpenseswhencashispaid.19.Recordingrevenuesearlyoverstatescurrent-periodincome;recordingrevenueslateunderstatescurrentperiodincome.20.Recordingexpensesearlyoverstatescurrent-periodincome;recordingexpenseslateunderstatescurrentperiodincome.MultipleChoiceQuestions69.Thetimeperiodprincipleassumesthatanorganization'sactivitiescanbedividedintospecifictimeperiodsincluding:A.Months.B.Quarters.C.Fiscalyears.D.Calendaryears.E.Allofthese.70.Abroadprinciplethatrequiresidentifyingtheactivitiesofabusinesswithspecifictimeperiodssuchasmonths,quarters,oryearsisthe:A.Operatingcycleofabusiness.B.Timeperiodprinciple.C.Going-concernprinciple.D.Matchingprinciple.E.Accrualbasisofaccounting.71.Interimfinancialstatementsrefertofinancialreports:A.Thatcoverlessthanoneyear,usuallyspanningone,three,orsix-monthperiods.B.Thatarepreparedbeforeanyadjustmentshavebeenrecorded.C.Thatshowtheassetsabovetheliabilitiesandtheliabilitiesabovetheequity.D.Whererevenuesarereportedontheincomestatementwhencashisreceivedandexpensesarereportedwhencashispaid.E.Wheretheadjustmentprocessisusedtoassignrevenuestotheperiodsinwhichtheyareearnedandtomatchexpenseswithrevenues.372.The12-monthperiodthatendswhenacompany'sactivitiesareattheirlowestpointiscalledthe:A.Fiscalyear.B.Calendaryear.C.Naturalbusinessyear.D.Accountingperiod.E.Interimperiod.73.Thelengthoftimecoveredbyasetofperiodicfinancialstatementsisreferredtoasthe:A.Fiscalcycle.B.Naturalbusinessyear.C.Accountingperiod.D.Businesscycle.E.Operatingcycle.474.Theaccountingprinciplethatrequiresrevenuetobereportedwhenearnedisthe:A.Matchingprinciple.B.Revenuerecognitionprinciple.C.Timeperiodprinciple.D.Accrualreportingprinciple.E.Going-concernprinciple.75.Adjustingentries:A.Affectonlyincomestatementaccounts.B.Affectonlybalancesheetaccounts.C.Affectbothincomestatementandbalancesheetaccounts.D.Affectonlycashflowstatementaccounts.E.Affectonlyequityaccounts.76.Themainpurposeofadjustingentriesisto:A.Recordexternaltransactionsandevents.B.Recordinternaltransactionsandevents.C.Recognizeassetspurchasedduringtheperiod.D.Recognizedebtspaidduringtheperiod.E.Correcterrors.77.Thebroadprinciplethatrequiresexpensestobereportedinthesameperiodastherevenuesthatwereearnedasaresultoftheexpensesisthe:A.Recognitionprinciple.B.Costprinciple.C.Cashbasisofaccounting.D.Matchingprinciple.E.Timeperiodprinciple.78.Thesystemofpreparingfinancialstatementsbasedonrecognizingrevenueswhenthecashisreceivedandreportingexpenseswhenthecashispaidiscalled:A.Accrualbasisaccounting.B.Operatingcycleaccounting.C.Cashbasisaccounting.D.Revenuerecognitionaccounting.E.Currentbasisaccounting.579.Adjustingentriesarejournalentriesmadeattheendofanaccountingperiodforthepurposeof:A.Updatingliabilityandassetaccountstotheirproperbalances.B.Assigningrevenuestotheperiodsinwhichtheyareearned.C.Assigningexpensestotheperiodsinwhichtheyareincurred.D.Assuringthatfinancialstatementsreflecttherevenuesearnedandtheexpensesincurred.E.Allofthese.80.Theapproachtopreparingfinancialstatementsbasedonrecognizingrevenueswhentheyareearnedandmatchingexpensestothoserevenuesis:A.Cashbasisaccounting.B.Thematchingprinciple.C.Thetimeperiodprinciple.D.Accrualbasisaccounting.E.Revenuebasisaccounting.81.Prepaidexpenses,depreciation,accruedexpenses,unearnedrevenues,andaccruedrevenuesareallexamplesof:A.Itemsthatrequirecontraaccounts.B.Itemsthatrequireadjustingentries.C.Assetandequity.D.Asseta