In the Context of Proper Accounting Practices, Identify a Major

question 81

Multiple Choice

In the context of proper accounting practices, identify a major difference between cash-based and accrual-based accounting systems.

• A)Cash-based systems must be used by large businesses, whereas accrual-based systems must only be used by the smallest businesses.
• B)Cash-based systems recognize revenue as it is generated, whereas accrual-based systems record revenue only when it occurs.
• C)Cash-based systems are generally used with periodic inventory counting systems, whereas accrual-based systems are used primarily with perpetual inventory counting systems.
• D)Cash-based systems are mostly used by publicly held corporations, whereas accrual-based systems are mostly used by privately held corporations.

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Definitions:

Substitutes

Two goods for which an increase in the price of one leads to an increase in the quantity demanded of the other.

General Equilibrium Analysis

Simultaneous determination of the prices and quantities in all relevant markets, taking feedback effects into account.

Partial Equilibrium Analysis

Determination of equilibrium prices and quantities in a market independent of effects from other markets.

Movie Theater Tickets

Physical or electronic vouchers that grant the holder the right to enter a movie theater and view a film.