Which Statement Is True Regarding Accounting Accruals

question 10

Multiple Choice

Which statement is true regarding accounting accruals?

• A)Errors or changes in accounting policy that affect non-current items like equipment will result in follow-through changes over a relatively short period.
• B)The purchase of equipment involves an initial accrual to record the asset followed by accrual reversals in the form of depreciation expense and derecognition of the asset upon disposal.
• C)Operating activities generally have relatively long cash cycles.
• D)Financing and investing activities generally have relatively short cash cycles.

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Definitions:

Estimated Line of Cost Behavior

A projection or forecast of how costs will change with different levels of activity.