Which Statement Is Not Correct

question 13

Multiple Choice

Which statement is not correct?

• A)The accrual method focuses on the balance sheet.
• B)The deferral method focuses on the income statement.
• C)The deferral methods matches tax expense to the balance sheet.
• D)The accrual and deferral methods are both tax allocation methods.

---

Definitions:

Days' Sales

A measure often used to evaluate the average time it takes for a company to convert its inventory into sales.

Lower-of-Cost-or-Market

An accounting principle that mandates inventory be recorded at the lower between its historical cost and current market value.

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time.

Inventory Quantity

The amount of merchandise, raw materials, work-in-progress, and finished goods that a company holds at any given point in time.