Reference no: EM132737134

Questions -

Q1. Which of the following is not a criterion to recognize revenue under GAAP?

A. The earnings process must be completed.

B. A product or service must be provided.

C. Cash must be collected.

D. GAAP requires that the accrual basis accounting principle be used in the revenue recognition process.

Q2. Which of the following best represents the matching principle criteria?

A. Expenses are reported in the period in which they were incurred.

B. Expenses may be reported in a different period than the matching revenues.

C. Revenue and expenses are matched based on when expenses are paid.

D. Revenue is recognized when an order occurs and not when the actual sale is initiated.

Q3. If a customer pays with a credit card and the service has been provided, which of the following accounts will be used to record the sales entry for this transaction?

A. Cost of Goods Sold, Merchandise Inventory, Sales Revenue

B. Sales Revenue, Credit Card Expense, Accounts Receivable

C. Accounts Receivable, Merchandise Inventory, Credit Card Expense

D. Cost of Goods Sold, Credit Card Expense, Sales Revenue

Q4. A car dealership sells a car to a customer for $35,000. The customer makes a 10% down payment, and the dealership finances the remaining 90% in-house. How much will the car dealership record in Accounts Receivable for this customer?

A. $31,500

B. $19,250

C. $8,750

D. $7,000