Under the Modified Accrual Basis of Accounting, Gains and Losses

question 41

Multiple Choice

Under the modified accrual basis of accounting, gains and losses on disposal of fixed assets

• A)are not recognized.
• B)are recognized when the proceeds cash of the sale are received on the installment basis.
• C)are recognized only if there is a gain.
• D)are recognized when the sale occurs, regardless of when the cash is collected.

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Definitions:

Greater Accuracy

Refers to a higher degree of precision or correctness in measurements, actions, or statements.

Automatic

Operating by itself with minimal or no human intervention, often referring to machinery, systems, or processes.

Double-Entry Bookkeeping System

An accounting method that records each transaction twice, once as a debit in one account and once as a credit in another, to ensure financial records balance.

Single-Entry System

A basic accounting method where each transaction is entered only once, either as an income or expense, making it less complex but more prone to errors than double-entry systems.