1. The matching principle requires that:

Expenses are recorded in the period cash is paid, revenues are recorded in the period in which it is earned

Expenses and revenues are recorded in the period in which cash is received Expenses are recorded in the period they are incurred, revenues are recorded in the period cash is received

Expenses are recorded in the period they are incurred, revenues are recorded in the period cash is received

Expenses are recorded in the same period as the revenues that they helped generate

2.When do the Income Statement account balances reset to zero?

Depends on the dates listed on the income statement and the balance sheet.

They do not reset to zero.

Depends on the industry the company operates in.

At the start of the companys new fiscal (business) year.

3.When do the Balance Sheet account balances reset to zero?

They do not reset to zero.

At the start of the companys new fiscal (business) year.

Depends on the dates listed on the income statement and the balance sheet.

Depends on the industry the company operates in.

4.

If an accrual based company has $300,000 in Revenue, $180,000 in COGS, $20,000 in SG&A, $45,000 in Inventory..how much cash do they have?

$120,000

Cant answer with the data given.

$100,000

$55,000

5. When do the Income Statement account balances reset to zero?

Depends on the dates listed on the income statement and the balance sheet.

They do not reset to zero.

Depends on the industry the company operates in.

At the start of the companys new fiscal (business) year.