6. Which of the following criteria must be met before an event should be recorded for accounting purposes?

a. The event must be an arm's-length transaction.

b. The event must be repeatable in a future period.

c. The event must be measurable in financial terms.

d. The event must be disclosed in the reported footnotes.

7. Adjusting entries normally involve

a. real accounts only.

b. nominal accounts only.

c. real and nominal accounts.

d. liability accounts only.

8. Which of the following is an item that is reportable in the financial records of an enterprise?

a. The value of goodwill earned through business operations

b. The value of human resources

c. Changes in personnel

d. Changes in inventory costing methods

9. The balance in a deferred revenue account represents an amount that is

Earned Collected

a. Yes Yes

b. Yes No

c. No Yes

d. No No

10. The debit and credit analysis of a transaction normally takes place when the

a. entry is posted to a subsidiary ledger.

b. entry is recorded in a journal.

c. trial balance is prepared.

d. financial statements are prepared.