Which of the Following Is in Accordance with Generally Accepted

question 171

Multiple Choice

Which of the following is in accordance with generally accepted accounting principles?

• A)Accrual-basis accounting
• B)Cash-basis accounting
• C)Both accrual-basis and cash-basis accounting
• D)Neither accrual-basis nor cash-basis accounting

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Definitions:

Investment Center

A business segment whose manager has control and is accountable for generating revenue, incurring costs, and making significant investment decisions.

Indirect Fixed Costs

Costs associated with the operation of a business that are not directly tied to a specific product or service and do not vary with the level of production.

Direct Fixed Costs

Costs that are directly associated with a specific product, department, or segment of a business and do not vary with the level of production or sales.

Flexible Budget

A budget that adjusts or flexes with changes in volume or other activity levels, allowing more accurate comparisons to actual spending.