Ch. 3

Question 1

When are adjusting entries required

Answer 1

at the end of every accounting period

Question 2

What increases in debit

Answer 2

Assets and Expenses

Question 3

What increases in credit

Answer 3

Liabilities and revenues

Question 4

expenses should be recognized in the same period as revenues are recorded

Answer 4

matching principle

Question 5

revenues should be recorded in the same period they are earned

Answer 5

revenue recognition principle

Question 6

Depreciation

Answer 6

the allocation of cost of plant assets to the income statement over their expected useful lifetime

Question 7

profit margin

Answer 7

net income/ net sales

Question 8

true or false GAAP requires accrual basis accounting

Answer 8

true