Accountıng I

Yanıt Açıklaması: Historical cost principle or Fair value principle

Yanıt Açıklaması: Accounting

Yanıt Açıklaması: Accounting standards are a set of principles and rules that companies follow when they prepare and publish their financial statements, providing a standardized way of describing the company’s financial performance. .

Yanıt Açıklaması: An account is an individual accounting tool that shows the increases and decreases in a specific asset, liability, or owner’s equity item during a specified period.

Yanıt Açıklaması: Revenue recognition principle dictates that revenue is recognized when it is earned not the cash is received. The correct answer is B.

Yanıt Açıklaması: External Users There are several types of external users and they can be individuals or organizations outside a company such as investors, creditors, taxing authorities, government, customers, suppliers etc. Managers of a company who plan, organize, and run the business are the most important group of internal users.

Yanıt Açıklaması: Adjusting entries are important in order to prepare correct and up-to-date financial reports. There are two basic categories of adjusting entries. These are deferrals and accruals. In a deferral adjustment, cash will be paid before an expense is incurred or the cash will be received before the revenue is earned. Accruals adjustments are the opposite of deferrals. An accrual records an expense before the cash is paid, or it records the revenue before the cash is received. The two basic categories of adjustments can be divided into four different types as follows: 1. Deferred (Prepaid) Expenses 2. Deferred (Unearned) Revenues 3. Accrued Expenses 4. Accrued Revenues

Yanıt Açıklaması: Accounting is based on either the cash basis or the accrual basis. In cash basis accounting, companies record revenues when they receive the cash and they record expenses when the cash is paid. In accrual basis accounting, companies record revenues when they perform services (rather than when they receive cash) and record expenses when they are incurred (rather than when paid). The time-period concept assumes that unlimited economic life of a company will be divided into regular intervals and that financial statements will be prepared for specific periods such as a month, quarter, or year. Accounting periods may be monthly, quarterly, semiannually or yearly.

Yanıt Açıklaması: The journal is the main book which includes the original entries of company’s transactions. Transactions are recorded in chronological order (following the order in which they occurred) by applying debit and credit procedure. In other words, journal entries include debit and credit effects of each transaction.