Which of the Following Concepts Is Important to Accrual Accounting

question 8

Multiple Choice

Which of the following concepts is important to accrual accounting?

• A)Time period,because accrual accounting divides earnings into time periods
• B)Monetary unit,because inflation is a big factor in the environment
• C)Cash basis,because if cash is not received,revenue is not accrued
• D)Entity concept,because personal transactions must be separated from business transactions

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Definitions:

Price Changes

Alterations in the cost of goods or services over time, which can be influenced by factors such as supply and demand.

Agricultural Act

Legislation that regulates agricultural production, marketing, and subsidies.

Crop Insurance Programs

Government or private insurance schemes that compensate farmers for losses to their crops due to natural disasters or adverse weather conditions.

Household Income

The combined gross income of all members of a household, typically measured on an annual basis.