Solved

Match the Following Definitions with the Terms 1 Through 9

Question 264

Matching

Match the following definitions with the terms 1 through 9.Place the letter that identifies the best definition in the blank space next to the term.

Premises:

Responses:

An exchange of value between two parties.

Business transaction

The principle that assumes transactions and events can be expressed in money units.

Revenue recognition principle

The cost of assets or services used to earn revenue.

Statement of cash flows

The relation between a company's assets, liabilities and equity.

Monetary unit principle

A financial statement that reports the changes in retained earnings over the reporting period; adjusted for increases from net income and for decreases such as dividends or net loss.

Business entity principle

Creditor's claims on assets.

Expenses

The principle that revenue is recognized when earned.

Liabilities

The principle that requires a business to be accounted for separately from its owners.

Statement of retained earnings

A financial statement that lists cash inflows (receipts) and cash outflows (payments); the cash flows are arranged by operating, investing and financing activities.

Accounting equation

Premises:

An exchange of value between two parties.

The principle that assumes transactions and events can be expressed in money units.

The cost of assets or services used to earn revenue.

The relation between a company's assets, liabilities and equity.

A financial statement that reports the changes in retained earnings over the reporting period; adjusted for increases from net income and for decreases such as dividends or net loss.

Creditor's claims on assets.

The principle that revenue is recognized when earned.

The principle that requires a business to be accounted for separately from its owners.

A financial statement that lists cash inflows (receipts) and cash outflows (payments); the cash flows are arranged by operating, investing and financing activities.

Responses:

Business transaction

Revenue recognition principle

Statement of cash flows

Monetary unit principle

Business entity principle

Expenses

Liabilities

Statement of retained earnings

Accounting equation

Correct Answer:

Premises:

Responses:

An exchange of value between two parties.

The principle that assumes transactions and events can be expressed in money units.

The cost of assets or services used to earn revenue.

The relation between a company's assets, liabilities and equity.

A financial statement that reports the changes in retained earnings over the reporting period; adjusted for increases from net income and for decreases such as dividends or net loss.

Creditor's claims on assets.

The principle that revenue is recognized when earned.

The principle that requires a business to be accounted for separately from its owners.

A financial statement that lists cash inflows (receipts) and cash outflows (payments); the cash flows are arranged by operating, investing and financing activities.