1) Deferred revenue occurs when cash is received from acustomer before work or the sale is completed.
True
False

2) In accrualaccounting, revenue may be earned prior to orafter cash is received.
True
False

3)An expense incurred in 2016 is not paid until 2017. Usingthe accrual basis of accounting, the expense should appearon:

A.both the 2016 and 2017 income statements

B.the 2016 income statement

C.neither the 2016 nor 2017 income statement

D.the 2017 income statement

4) On December 1, 2017, Cream Ale Ltd. receives $1,800in advance for an agreement to brew beer during the months ofDecember, January, and February. As of December 31, 2017, Cream AleLtd:

A)would have recognized $600 cash under accrual accounting, andwould have recognized 1,800 cash under cash ?basis accounting

B.would have a $0 liability to its client under accrualaccounting, and would have a $1,200 liability to its client undercash?basis accounting

C.would have recognized $600 revenue under accrual accounting,and would have recognized $1,800 revenue under cash?basisaccounting

D. would have a $1,200 liability to its client under accrualaccounting, and would have a $1,800 liability to its client undercash?basis accounting


5)A deferral refers to an? event:

A.where the recognition of an expense or revenue is recordedafter the cash is paid or received

B.where the recognition of an expense or revenue is recordedbefore the cash is paid or received

C.where the liability for an expense is recorded after theexpense is actually incurred

D.where the liability for an expense is recorded before theexpense is actually incurred


6) Retained earnings for the beginning of a period appearson the statement of retained earnings while the ending balance ofretained earnings appears on the statement of retained earnings andthe balance sheet.
True
False