Which of the Following Statements Is CORRECT

question 45

Multiple Choice

Which of the following statements is CORRECT?

• A)The focal point of the income statement is the cash account, because that account cannot be manipulated by "accounting tricks."
• B)The reported income of two otherwise identical firms cannot be manipulated by different accounting procedures provided the firms follow Generally Accepted Accounting Principles (GAAP).
• C)The reported income of two otherwise identical firms must be identical if the firms are publicly owned, provided they follow procedures that are permitted by the Securities and Exchange Commission (SEC).
• D)If a firm follows Generally Accepted Accounting Principles (GAAP), then its reported net income will be identical to its reported net cash flow.
• E)The income statement for a given year, say 2007, is designed to give us an idea of how much the firm earned during that year.

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Definitions:

Internals

Individuals who believe they can control their lives and outcomes through their own efforts, reflecting an internal locus of control.

Coronary-prone Behavior Patterns

Personality traits and behaviors, such as hostility and urgency, which have been linked to an increased risk of heart disease.

Self-efficacy Expectations

The belief in one's ability to execute behaviors necessary to produce specific performance attainments, influencing how one feels, thinks, and acts.

Psychological Hardiness

A personality trait characterized by resilience and the ability to endure stressful situations, often associated with a positive outlook in challenging conditions.