Which of the Following Statements Is True

question 24

Multiple Choice

Which of the following statements is true?

• A)Accrual-based net income can be manipulated because it is based on estimates.
• B)Cash flows are easily manipulated because they are based on estimates.
• C)Accrual-based net income is not easily manipulated because valuation for such items as bad debts and inventory are precise and based on objectively verifiable information.
• D)Cash flows are not easily manipulated because they are generated by internal transactions and do not involve external parties.

---

Definitions:

Executive Functions

Functions of the brain that involve the ability to sustain concentration; use abstract reasoning and concept formation; anticipate, plan, and program; initiate purposeful behavior; self-monitor; and shift from maladaptive patterns of behavior to more adaptive ones.

Prefrontal Cortex

The front part of the frontal lobe of the brain, involved in complex behaviors such as planning, decision making, and moderating social behavior.

Hippocampus

A critical region of the brain involved in memory formation and spatial navigation.

Hypothalamus

A region of the brain below the thalamus that coordinates both the autonomic nervous system and the activity of the pituitary, controlling body temperature, thirst, hunger, and other homeostatic systems.