Which best describes the revenue recognition principle?

Group of answer choices

It is unrelated to the matching principle of accounting.

It is not GAAP.

It requires that revenues be recorded when earned, not before or after.

It requires that revenues be recorded when the cash is received, not before or after.

Which of the following statements is correct concerning the accrual basis of accounting?

Group of answer choices

The accrual basis does not consider the revenue recognition principle.

The accrual basis must follow the revenue recognition principle but not the matching principle

The accrual basis uses the adjusting process to recognize revenues when earned and to match expenses with revenues.

The accrual basis recognizes revenues when earned and records expenses when cash is paid.

The accrual basis is the same as the cash basis of accounting.

A company paid for a 12-month insurance policy on February 1, 2004 for $3,600 and debited the Prepaid Insurance account for the cost of the policy. Assuming no previous adjusting entries have been made, what adjusting entry should be made at March 31, 2004 for the interim financial statements to be properly stated?

Group of answer choices

Debit Insurance Expense for $3,600; Credit Prepaid Insurance for $3,600

Debit Prepaid Insurance for $600; Credit Insurance Expense for $600

Debit Insurance Expense for $600; Credit Prepaid Insurance for $600

Debit Insurance Expense for $300; Credit Prepaid Insurance for $300

Debit Insurance Expense for $2,700; Credit Prepaid Insurance for $2,700

If a magazine publisher receives $12 million for annual subscriptions to a monthly magazine on November 1, what would be the appropriate adjustment on 12/31 assuming no other transactions had taken place?

Group of answer choices

Credit Unearned Subscriptions and Debit Subscription Income for two million.

Debit Unearned Subscriptions and Cr. Subscription Income for two million.

Debit Prepaid Subscriptions and Cr. Unearned Subscriptions for two million.

Debit Prepaid Subscriptions and Cr. Unearned Subscriptions for one million.

The ABC Company has a $15,000 payroll for a 5-day workweek starting on Monday and ending on Friday. If the fiscal year ends on a Tuesday, what would be the appropriate adjustment?

Group of answer choices

Debit Salary Expense $15,000 and Credit Salaries Payable $15,000

Debit Salary Expense $6,000 and Credit Salaries Payable $6,000

Debit Salary Expense $9,000 and Credit Salaries Payable $9,000

Debit Salaries Payable $10,000 and Credit Salary Expense $10,000

None of the above