Since Research Indicates That Investors Are Apparently Not Fooled by the Format

question 77

True/False

Since research indicates that investors are apparently not fooled by the format of the information, accounting regulators should focus on disclosure issues.

---

Definitions:

Accrual-Basis Accounting

Accounting basis in which companies record transactions that change a company's financial statements in the periods in which the events occur.

Cash-Basis Accounting

Accounting basis in which companies record revenue when they receive cash and an expense when they pay out cash.

Revenue Recognition Principle

An accounting principle stating that revenue should be recorded when it is earned and realizable, regardless of when the cash is received.

Expense Recognition Principle

An accounting principle that states expenses should be recognized and recorded when they are incurred, regardless of the timing of cash payments.