11) An account receivable is ________. A) an accrual B) a deferral C) a cash sale to a customer D) cash collected from a customer 12) Prepaid insurance is ________. A) an accrual B) a...

11) An account receivable is ________.

A) an accrual

B) a deferral

C) a cash sale to a customer

D) cash collected from a customer

12) Prepaid insurance is ________.

A) an accrual

B) a deferral

C) insurance expense

D) a liability

13) An accrual transaction is one in which revenue is earned before cash is received.

14) Cash-basis accounting is the preferred method of accounting according to the FASB.

15) On April 25, Team Shirts paid $1,000 for advertising for May and June. This transaction is a deferral.

16) Accrual accounting is an accounting system in which the measurement of income is based on cash receipts and cash disbursements.

17) Financial statements should be prepared using accrual accounting.