Which of the Following Is a Reason Why Profits Based

question 95

Multiple Choice

Which of the following is a reason why profits based on an accrual-basis accounting system will differ from the firm's cash flows?

• A) Sales reported in an income statement includes only cash sales rather than both cash and credit sales.
• B) The depreciation expense shown in an income statement is an expense involving cash.
• C) Cash spent for inventory doesn't represent all inventory purchases since some inventory is financed by credit.
• D) On an income statement, profits are reported when cash is received, and expenses are recorded when they are paid.

---

Definitions:

Glycoproteins

Proteins that have carbohydrate groups attached to the polypeptide chain, playing crucial roles in cell-cell interactions and immune function.

Phospholipid Bilayer

The fundamental structure of a cell membrane, composed of two layers of phospholipids, with hydrophobic tails facing inward and hydrophilic heads facing outward.

Cholesterol

A type of lipid molecule that is essential for the formation of cell membranes, certain hormones, and Vitamin D.

Receptor Proteins

Proteins located on the surface of cells or within cells that bind to specific molecules, leading to a cellular response.