ntermediate Accounting Chapter 2 CPA Type Questions 1) Indicate whether the statement about revenue recognition is true or false by writing true or false beside each statement. 1. Magazine subscription revenues may be recognized as production and delivery occur. 2. Revenues from rent may be recognized based on the passage of time. 3. Revenue is recognized when goods are shipped. 4. Revenues and gains are usually measured by the exchange prices of the items involved. 5. Revenue is recognized when payments are received 2) Select from the option list provided below the term defined by each concept below. Each choice may be used once, more than once, or not at all. a. Liabilities b. Revenue C. Gains d. Expense e. Assets f. Losses g. Accrual Accounting h. Cost-Basis Accounting i. Amortization j. Earnings k. Allocation 1. Investment by Owners Concept Term 1. Probable future economic benefits 2. Enhancements of assets or settlements of liabilities from an entity's major or central operations 3. Formal recording of an item 4. Probable future sacrifices of economic benefits 5. Recording the financial effects of transactions when they occur 6. Increases in equity from incidental transactions of an entity, except from investments by owners 7. Decreases in equity in the normal course of business on an ongoing basis that result in outflows or other uses of assets or incurrences of liabilities (or both), apart from distributions to owners 3) Select from the option list provided below the description that best matches cach accounting concept below. Each choice may be used once, more than once, or not at all. a. Interactive Quality b. Criterion for Recognition c. Constraint d. Assumption Concept Description 1. Cost 2. Materiality 3. Monetary unit 4. Periodicity 5. Performance obligation 6. Going concern