The System of Preparing Financial Statements Based on Recognizing Revenues

question 17

Multiple Choice

The system of preparing financial statements based on recognizing revenues when the cash is received and reporting expenses when the cash is paid is called:

• A) Cash basis accounting.
• B) Revenue recognition accounting.
• C) Current basis accounting.
• D) Accrual basis accounting.
• E) Operating cycle accounting.

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Definitions:

Old Age Security

A government-funded pension program in certain countries designed to provide a basic level of income to seniors.

Defined Pension Plans

A retirement plan where an employer promises a specified pension payment upon retirement, based on the employee's earnings history, tenure of service, and age.

Deferred Profit-sharing Plans

Retirement plans where a portion of the company's profits is contributed to the employees' retirement savings accounts, typically vested over time.

Flexible Benefit Plans

Plans that allow employees to choose from a variety of benefits to tailor their benefits package to their personal needs and preferences.