Under the accrual basis of accounting: cash must be received before revenue is recognized. net income is calculated by matching cash outflows against cash inflows. events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received. a company's accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles. Question 5 (1 point) The general term employed to indicate an expense that has not been paid or revenue that has not been received and has not yet been recognized in the accounts is: contra asset. prepayment asset. accrued. Question 6 (1 point) As prepaid expenses expire with the passage of time, the correct adjustment will be a(n): increase an asset account and a decrease an expense account. increase an expense account and a decrease an asset account. increase an asset account and a decrease an asset account. increase an expense account and a decrease an expense account