Question

Match each definition with its related term by selecting the appropriate term in the dropdown provided. There should be only one definition per term (that is, there are more definitions than terms). (Select "None of these are correct" if there is no Term for the "Definition".)
1. Operating cycle
2. Accrual basis accounting
3. Retained Earnings = Beginning Retained Earnings + Net Income - Dividends Declared
4. Unearned revenue
5. Revenues - Expenses = Net Income
6. Expenses
7. Prepaid Expenses
8. Gains
9. None of these are correct

A. Report the long life of a company in shorter periods.
B. Record expenses when incurred in earning revenue.
C. The time it takes to purchase goods or services from suppliers, sell goods or services to customers, and collect cash from customers.
D. Record revenues when earned and expenses when incurred.
E. Increases in assets or decreases in liabilities from peripheral transactions.
F. An asset account used to record cash paid before expenses have been incurred.
G. Record revenues when earned and measurable (when the company transfers promised goods or services to customers, and in the amount the company expects to receive).
H. Decreases in assets or increases in liabilities from peripheral transactions
I. Record revenues when received and expenses when paid.
J. The income statement equation.
K. Decreases in assets or increases in liabilities from central ongoing operations.
L. The retained earnings equation.
M. A liability account used to record cash received before revenues have been earned.

Answer 1

The terms and the definitions are matched appropriately

Explanation:

1. Operating cycle - C. The time it takes to purchase goods or services from suppliers, sell goods or services to customers, and collect cash from customers.

2. Accrual basis accounting- B. Record expenses when incurred in earning revenue.

3.  Retained Earnings = Beginning Retained Earnings + Net Income - Dividends Declared -  J. The income statement equation.

4. Unearned revenue - F. An asset account used to record cash paid before expenses have been incurred.

5. Revenues - Expenses = Net Income - L. The retained earnings equation.

6. Expenses  - I. Record revenues when received and expenses when paid.

7. Prepaid Expenses  -  A. Report the long life of a company in shorter periods.

8. Gains  - E. Increases in assets or decreases in liabilities from peripheral transactions.

9. None of these are correct