Ch. 4

Question 1

End of Period

Answer 1

1. Prepare a trial balance
2. Adjust revenues and expenses
3. Prepare financial statements
4. Close revenues, gains, losses, and expenses

Question 2

Revenue Recognition Principle

Answer 2

Revenues are recorded when they are earned.

Question 3

Expense Recognition Principle

Answer 3

Expenses are recorded when they are incurred to generate revenue.

Question 4

Deferred Revenue

Answer 4

Unearned Revenue

Revenue

Question 5

Accrued Revenue

Answer 5

Receivable

Revenue

Question 6

Deferred Expense

Answer 6

Expense

Prepaid Expense

Question 7

Accrued Expense

Answer 7

Expense

Payable