1. An accountant records a transaction when cash is paid or received under which basis of accounting? 
cash 
deferred 
accrual 
liability 
2. When unearned revenue is initially recorded as a revenue, the adjusting entry would include a 
credit to a liability. 
debit to a liability. 
debit to an asset. 
credit to revenue. 
3. A principle used to record revenue when it is earned is the 
matching principle 
revenue principle 
timing principle 
current principle 
4. The balance in prepaid rent after adjustment represents 
a liability on the balance sheet. 
an expense on the income statement 
revenue on the income statement 
an asset on the balance sheet.