Adjusting the Accounts (Reviewer)

|1 |The time period assumption states that |D |
| |a. a transaction can only affect one period of time. | |
| |b. estimates should not be made if a transaction affects more than| |
| |one time period. | |
| |c. adjustments to the enterprise 's accounts can only be made in | |
| |the time period when the business terminates its operations. | |
| |d. the economic life of a business can be divided into artificial | |
| |time periods. | |
|2 |The time period assumption is also referred to as the |C |
| |a. calendar assumption. | |
| |b. cyclicity assumption. | |
| |c. periodicity assumption. | |
| |d. fiscal assumption. | |
|3 |Which of the following are in accordance with generally accepted |A |
| |accounting principles? | |
| |a. Accrual basis accounting | |
| |b. Cash basis accounting | |
| |c. Both accrual basis and cash basis accounting | |
| |d. Neither accrual basis nor cash basis accounting | |
|4 |The revenue recognition principle dictates that revenue should be |B |
| |recognized in the accounting records | |
| |a. when cash is received. | |
| |b. when it is earned. | |
| |c. at the end of the month. | |
| |d. in the period that income taxes are paid.