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.

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Definitions:

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Refers to a socioeconomic status or background characterized by families whose members are primarily engaged in manual labour with lower income and educational levels.

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A regional dialect found in the Appalachian region of the United States, marked by distinctive phonological features.

Blue-Collar Worker

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