CHAPTER 3 QUESTIONS ASSESS YOUR PROGRESS Review Questions 1. What is the difference between cash basis accounting versus accrual basis account 2. Which method of accounting (cash or accrual basis)is consistent with generally accepted accounting principles? 3. Which accounting concept or principle requires companies to divide their activities into smal time segments such as months, quarters, or years? 4. What is fiscal year? Why might companies choose to use a fiscal year that is not a ca 5. Under the revenue recognition principle, when is revenue recorded? 6. Under the matching principle, when are expenses recorded? 7. When are adjusting entries completed, and what is heir purpose? 8. What is a prepaid xpense? 9. What is a contra account? 10. How is book value calculated, and what does it represent? 11. When is an adjusted trial balance prepared, and what is its purpose? 12. If an accrued expense is not recorded at the end of the year, what is the impact on the financial statements