Which of the Following Statements Is CORRECT

question 14

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 cash flow.
• E) The income statement for a given year, say 2011, is designed to give us an idea of how much the firm earned during that year.

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Definitions:

Direct Format Letter

A type of letter or communication that gets straight to the point, often used in business settings for clarity and efficiency.

Application Letter

A letter written to apply for a job or admission to an educational program, highlighting the applicant's qualifications and interest.

Résumé

A document created by an individual that lists their background, skills, and accomplishments for potential employers.

Benefit

An advantage or profit gained from something, often used in the context of employment perks or features of products/services.