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.

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Definitions:

Cognitive Dissonance

A psychological discomfort experienced when holding two or more conflicting cognitions, beliefs, or values simultaneously.

Assimilation

The cognitive process of fitting new information into existing cognitive schemas, perceptions, and understanding.

Educational Settings

Environments or contexts where formal learning takes place, such as schools, colleges, and universities.

Repress

The psychological act of burying distressing thoughts, memories, or desires in the subconscious, to the point of becoming unaware of them.