Which of the Following Is in Accordance with Generally Accepted

question 215

Multiple Choice

Which of the following is in accordance with generally accepted accounting principles?

• A) Accrual-basis accounting
• B) Cash-basis accounting
• C) Both accrual-basis and cash-basis accounting
• D) Neither accrual-basis nor cash-basis accounting

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Definitions:

Tax Law

Tax law encompasses the rules, policies, and regulations that oversee the tax process for individuals, businesses, and other entities, determining how taxes are calculated, collected, and managed.

Liability Approach

A method in accounting where emphasis is placed on accruing all expected future costs and obligations.

Income Tax Expense

The total amount of income tax a company owes to the government for a specified period, reflected in its financial statements.

Deferred Tax Liability

A tax obligation that a company will have to pay in the future, arising out of current transactions that are recognized in the financial statements before they are taxable.