TRUE-FALSE STATEMENTS
1. Many business transactions affect more than one time period.
2. The time period assumption states that the economic life of a business entity can be divided into artificial time periods.
3. The time period assumption is often referred to as the expense recognition principle.
4. A company's calendar year and fiscal year are always the same.
5. Accounting time periods that are one year in length are referred to as interim periods.
6. Under International Financial Reporting Standards (IFRS) the time period assumption means companies must issue financial statements using a calendar year time period.
7. International Financial Reporting Standards (IFRS) include a revenue recognition principle that states that “let the revenues follow the expenses.”
8. Under International Financial Reporting Standards (IFRS) revenues occur when assets are used up or when liabilities are incurred to generate revenue.
9. Under International Financial Reporting Standards (IFRS) the cash-basis of accounting requires companies to record transactions in the period in which the events occur.
10. Income will always be greater under the cash basis of accounting than under the accrual basis of accounting.