Final answer:
Cash-basis accounting entails recording revenues and expenses when cash is exchanged, while the fiscal year refers to a one-year accounting period. The revenue recognition principle dictates recording transactions when they occur, and the expense recognition principle requires recognizing expenses in the same period as the revenues they generate.
Step-by-step explanation:
The provided list of concepts relates to accounting methods and periods within a fiscal year. These terms are integral to how businesses track their financial performance.
1. Cash-basis accounting: This is a method where companies record revenues when they receive cash and record expenses when they pay out cash.
2. Fiscal year: This is an accounting period that is one year in length but does not necessarily start on January 1 and end on December 31. For example, the U.S. government fiscal year starts on October 1 and ends on September 30 of the next year.
3. Revenue recognition principle: According to this principle, companies record transactions in the period in which the events occur, regardless of when the cash transaction happens.
4. Expense recognition principle: This is the concept that expenses should be matched with revenues. It specifies efforts (expenses) should be recognized in the same period as the accomplishments (revenues) they help to generate, ensuring accurate profit reporting.
Additionally, the explanation for "Monthly and quarterly time periods" relates to how accountants divide the economic life of a business into artificial time periods for better management and reporting.