The accounting basis that records revenues when goods or services are provided to customers and expenses with related revenues is referred to as:

A) Cash-basis.

B) Profit-basis.

C) Accrual-basis.

D) Reporting-basis.

Ch3 answer: C

The revenue recognition principle states that:

A) Revenue should be recognized in the period the cash is received.

B) Revenue should be recognized in the period goods and services are provided.

C) Revenue should be recognized in the balance sheet.

D) Revenue is a component of common stock.

Ch3 answer: B

The accounting basis that helps to measure and report revenues and expenses in a way that clearly reflects the ability of a company to generate value for its owners is referred to as:

A) Cash-basis.

B) Accrual-basis.

C) Profit-basis.

D) Reporting-basis.

Ch3 answer: B