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Accounting MC: Matching revenue and expense; financial statements

Please select the correct answer:

1. MC Matching revenues and expenses refers to:

a). recording revenues when a product is sold or a service is rendered.
b). accurately reflecting the results of operations for a fiscal period.
c). recording revenues when cash is received.
d). having revenues equal expenses

2. The purpose of the income statement is to show the:

a). revenues collected during the period covered by the statement.
b). market value per share of stock at the date of the statement.
c). change in the fair market value of the assets from the prior income statement.
d). net income or net loss for the period covered by the statement.

Solution Preview

1. Matching is about putting expenses in the same period as the revenue that those activities (expenses) generated. You have to put the cost of the goods sold in the same period as the revenues from selling those goods. See? So matching gets the profits properly ...

Solution Summary

Response tells you what to pick but also why the other items were not usable and why.