Multiple choice

1.  Accrual basis accounting requires that expenses be recognized when incurred regardless of when paid. 

True

False

2.  The revenue recognition principle dictates that revenue be recognized in the accounting period in which cash is received. 

True

False

3.  Monthly and quarterly time periods are called 

a. calender periods. 

b. fiscal periods. 

c. interim periods. 

d. quarterly periods. 

4.  The time period assumption states that 

a.  a transaction can only affect one period of time. 

b.  estimates should not be made if a transaction affects more than one time period. 

c.  adjustments to the enterprise's accounts can only be made in the time period when the 

business terminates its operations. 

d.  the economic life of a business can be divided into artificial time periods.