Which Statement Is Correct

question 113

Multiple Choice

Which statement is correct?

• A) As long as a company consistently uses the cash basis of accounting generally accepted accounting principles allow its use.
• B) The use of the cash basis of accounting violates both the revenue recognition and expense recognition principles.
• C) The cash basis of accounting is objective because no one can be certain of the amount of revenue until the cash is received.
• D) As long as management is ethical there are no problems with using the cash basis of accounting.

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Definitions:

Ethical Standards

Principles that govern the behavior of individuals and organizations, often serving as guidelines for moral and correct actions and decisions.

Superego

A component of Freud's psychoanalytic theory representing the internalized societal and parental standards of right and wrong.

Morality Principle

In psychoanalytic theory, a component of the superego that consists of the internalized standards of right and wrong guiding behavior.

Ego

In psychoanalytic theory, the part of the personality responsible for dealing with reality, balancing the demands of the id and the superego.