Which Statement Is Not Correct

question 63

Multiple Choice

Which statement is not correct?

• A)The accrual method focuses on the balance sheet.
• B)The deferral method focuses on the income statement.
• C)The deferral method matches tax expense to the balance sheet.
• D)The accrual and deferral methods are both tax allocation methods.

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Definitions:

Accounts Receivable

The balance of money owed to a company by its customers for goods or services delivered or used but not yet paid for.

Credit

An entry recording an increase in assets or decrease in liabilities and equity on the company’s balance sheet, or the provision of goods or services in exchange for a promise of payment in the future.

Equity

The value of an ownership interest in property, including shareholders' equity in a company, represented by the assets minus liabilities.

Revenues

The total amount of money generated by the sale of goods, services, or other income for a company before any expenses are deducted.