Which of the Following Statements Is CORRECT

question 42

Multiple Choice

Which of the following statements is CORRECT?

• A) The focal point of the income statement is the cash account, because that account cannot be manipulated by "accounting tricks."
• B) The reported income of two otherwise identical firms cannot be manipulated by different accounting procedures provided the firms
• Follow Generally Accepted Accounting Principles (GAAP).
• C) The reported income of two otherwise identical firms must be identical if the firms are publicly owned, provided they follow procedures that are permitted by the Securities and Exchange
• Commission (SEC).
• D) If a firm follows Generally Accepted Accounting Principles (GAAP), then its reported net income will be identical to its reported net
• Cash flow.
• E) The income statement for a given year, say 2007, is designed to
• Give us an idea of how much the firm earned during that year.

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Definitions:

Hypertonic

A solution with higher osmotic pressure (solute concentration) than another solution, leading cells to lose water.

Isotonic

A solution that has the same salt concentration as cells and blood, preventing net water movement across cell membranes.

NaCl

Sodium chloride, commonly known as table salt, is an ionic compound consisting of sodium and chloride ions.

Solute

Substance that is dissolved in a solvent, forming a solution.