Which of the Following Statements Regarding Cash and Accrual Accounting

question 98

Multiple Choice

Which of the following statements regarding cash and accrual accounting is true?

• A)If payment is received at the same time a service is produced and sold,there is no difference between how cash and accrual accounting record the transaction.
• B)The cash basis of accounting works best when a lengthy delay exists between the timing of cash flows and the underlying business activities to which they relate.
• C)If a company receives a bill for rent for the period and decides to delay payment,the rent will not be recorded as an expense according to the accrual model of accounting.
• D)The cash basis of accounting would record unearned revenue if a company received a deposit in advance of services to be rendered by the company.

---

Definitions:

Public Good

A good that is non-excludable and non-rivalrous, meaning it can be enjoyed by all members of society without reducing its availability to others.

Majority Vote

A decision rule that selects alternatives which have a majority, that is, more than half the votes.

Ranked Preferences

A method of ordering alternatives based on their level of desirability or utility to an individual or group.