1. Under the accrual basis of accounting, cash receipts and disbursements may:

Precede, coincide with, or follow the period in which revenue and expenses are recognized.

Precede or coincide with but never follow the period in which revenue and expenses are recognized.

Coincide with or follow but never precede the period in which revenue and expenses are recognized

Only coincide with the period in which revenue and expenses are recognized.

2. Which statement regarding accrual versus cash basis of accounting is true?

The cash basis is appropriate for some smaller entities.

The cash basis is less useful in predicting the timing and amounts of future cash flows

Application of the cash basis results in an income statement reporting revenue and expenses.

The cash basis requires a complete set of records.

3. Under the cash basis of accounting:

Revenue is recorded when earned.

Accounts receivable should be recognized.

Depreciation of assets having an economic life of more than one year is not recognized.

The matching principle is ignored.

4. Total net income over the life of an entity is:

Higher under the cash basis than under the accrual basis

Lower under the cash basis than under the accrual basis

The same under the cash basis as under the accrual basis

Not susceptible to measurement

5. Under cash basis, revenue is recorded:

When earned and realized.

When earned and realizable.

When earned.

When realized.