Essay Questions 76.Kenyon Company uses accrual accounting. Indicate whether each of the following statements regarding Kenyon's accounting system is true or false._____ a) The recognition of...

Essay Questions

76.Kenyon Company uses accrual accounting. Indicate whether each of the following statements regarding Kenyon's accounting system is true or false.


_____ a) The recognition of accounting events and the realization of cash consequences may occur in different accounting periods.
_____ b) The cash consequence of a transaction always precedes its accounting recognition.
_____ c) Expenses may either be matched to revenues they produce or to periods in which they are incurred.
_____ d) Kenyon may record accrual transactions, but may not record deferral transactions.
_____ e) Kenyon is not permitted to make cash sales.

77.Whetstone Co. performed services for a customer on account. Indicate whether each of the following statements about this transaction is true or false.


_____ a) Assets and equity both increase when the revenue is recognized.
_____ b) This transaction did not affect cash flows.
_____ c) The company recorded an increase in revenue and a decrease in accounts receivable.
_____ d) Recognition of revenue would be delayed until cash was received.
_____ e) This transaction is an example of an asset source transaction.