Fte Following Statements About the Cash Basis Method of Accounting

question 25

Multiple Choice

fte following statements about the cash basis method of accounting are false, except:

• A) fte prepayment made for future services may be deducted currently.
• B) Interest credited to a savings account is not taxed until withdrawn.
• C) Stock received for services rendered are taxed only in the year sold.
• D) fte exchange of services may lead to gross income to both parties.

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Definitions:

Total Revenue

The overall amount of money generated by a firm from its sales activities before any expenses are subtracted.

Marginal Cost Curve

It illustrates the change in total cost that arises when the quantity produced is incremented by one unit; this is the cost of producing one additional unit of a good.

Short-Run Supply

The supply provided by firms in the short term when at least one input, usually capital, is fixed.

Economic Profit

The contrast between the aggregate income and complete costs, both visible and unseen, of a company.