The system of accounting where revenues are recorded when they are earned and expenses are recorded when they are incurred is called the cash basis of accounting.

Generally accepted accounting principles require the accrual basis of accounting.

True

False

The system of accounting where revenues are recorded when they are earned and expenses are recorded when they are incurred is called the cash basis of accounting.

True

False

The revenue recognition principle requires that the reporting of revenue be included in the period when cash for the service is received.

True

False

An adjusting entry to accrue an incurred expense will affect total liabilities.

True

False

A company realizes that the last two days' revenue for the month was billed but not recorded. The adjusting entry on December 31 is a debit to Accounts Receivable and a credit to Fees Earned.

True

False

A company receives $6,500 for two season tickets sold on September 1. If $2,500 is earned by December 31, the adjusting entry made at that time is a debit to Cash of $2,500, and a credit to Ticket Revenue of $2,500.

True

False

The balance in the accumulated depreciation account is the sum of the depreciation expense recorded in past periods.

True

False

A fixed asset's market value is reflected on the balance sheet.

True

False

The financial statements are prepared from the unadjusted trial balance.

True

False

The adjusted trial balance verifies that total debits equal total credits before the adjusting entries are prepared.

True

False