11) The income statement is sometimes called the statement of earnings. 12) Supplies on the balance sheet equals the amount of supplies used up during a period. 13) An accrual is a transaction...

11) The income statement is sometimes called the statement of earnings.

12) Supplies on the balance sheet equals the amount of supplies used up during a period.

13) An accrual is a transaction in which the action comes after the exchange of cash.

14) A deferral is a transaction in which the exchange of dollars comes before the action.

15) Making an adjustment for a transaction in which the action has occurred but the cash has not yet changed hands is called "accruing" the revenue or expense.

16) Accrual accounting requires that revenue be recorded when it is earned even if the cash from a sale to a customer has not been collected yet.