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11 salary expense is recognized on the income statement when the salaries are paid r 4298689

 

11. Salary expense is recognized on the income statement when the salaries are paid rather than when the employee provides the services. 
12. A gain resulting from the sale of plant and equipment does not create operating income on the income statement. 
13. Under accrual accounting, interest expense would be recognized on the income statement when the interest has accrued with the passage of time even though cash has not been paid. 
14. Under accrual accounting, revenues are recognized when earned and expenses are recognized when incurred. 
15. Application of generally accepted accounting principles requires that the accrual basis of accounting be used for reporting revenues and expenses on the income statement. 
16. The matching principle requires expenses to be recorded on the income statement when incurred in generating revenues. 
17. The revenue principle recognizes revenue from the sale of goods when ownership passes from the seller to the buyer regardless of the timing of the cash collection from customers. 
18. Selling inventory to a customer on account results in an increase in both assets and revenues. 
19. Cash collected prior to the providing of the good or service results in an increase in both assets and liabilities. 
20. Using cash to purchase office supplies which will be consumed later results in an increase in expenses and a decrease in assets as of the time of purchase. 
 

 

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