Review Questions
1
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Joe runs a small barbershop. Most of his customers pay with cash. He has only a few monthly expenses including wages for one employee and utilities. Which method of accounting should Joe use?
2
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Which method of accounting generally provides the most accurate information on organizational performance (income or loss)?
3
.
Under the accrual basis of accounting, when is an expense recorded?
4
.
Describe the basic elements of a T-account.
5
.
What is double-entry accounting?
6
.
What is the expense recognition principle?
7
.
Why is ethics an important concept pertaining to revenue and expense recognition principles?
8
.
What is the revenue recognition principle?
9
.
What is the difference between a tangible and an intangible fixed asset? List common examples of each.
10
.
How is the cost of a fixed asset recorded and recognized over time?