1. What is the revenue recognition principle?
   1. Revenue should be recognized in the period when the performance obligation (work) is completed or provided.
   2. Expenses should be matched with revenues.
   3. The economic life of a business should be divided into artificial time periods.
   4. The fiscal year must match the calendar year.

2. The ________ basis of accounting record all transactions in the period when they occur.
   1. Cash
   2. Accrual
   3. Deferral
   4. Managerial

3. In accounting, the time period of January December is known as the ________ year.
   1. Long
   2. Quarterly
   3. Calendar
   4. Fiscal

4. Each of the following is a major of adjusting entry EXCEPT:
   1. Prepaid expense
   2. Accrued revenue
   3. Accrued expense
   4. Recognized revenue

5. Adjustments for prepaid expenses:
   1. Decrease assets and increase revenues
   2. Decrease expenses and increase assets
   3. Decrease assets and increase expenses
   4. Decrease revenues and increase assets

6. A ________ is made if mistakes are found after closing the temporary accounts for a period.
   1. Adjusting entry
   2. Correcting entry
   3. Asset entry
   4. Liability entry

7. All of the following are temporary accounts EXCEPT:
   1. Equipment
   2. Revenues
   3. Expenses
   4. Owners Drawings

8. The Cash, Accounts Receivable, and Supplies accounts are all examples of __________ on a balance sheet.
   1. Owners equity
   2. Assets
   3. Liabilities
   4. Net Income

9. Which of these steps is NOT part of the 9 steps of the accounting cycle?
   1. Journalizing and posting entries
   2. Preparing financial statements
   3. Preparing a worksheet
   4. Making adjusting entries

10. Expenses and Revenues are closed directly to which account?
    1. Dividends
    2. Cash
    3. Retained Earnings
    4. Income Summary

11. All merchandise that is sold during a period is recorded in which account?
    1. Cost of Goods Sold
    2. Supplies
    3. Equipment
    4. Revenues

12. The formula for Gross Profit is:
    1. Assets-Liabilities
    2. Expenses Revenues
    3. Revenues Cost of Goods Sold
    4. Cost of Goods Sold Expenses

13. The inventory system that keeps detailed records of every inventory purchase and sale is called:
    1. Periodic
    2. Perpetual
    3. Contra-accounting
    4. Purchase allowances

14. In purchase terms 2/10, net 30, a discount would be received if payment was made in how many days?
    1. 10
    2. 5
    3. 30
    4. 20

15. The accounting term referring to the shipping of merchandise is called:
    1. Purchasing
    2. Inventory
    3. Freight
    4. Receiving