Which Statement Is Correct

question 18

Multiple Choice

Which statement is correct?

• A)As long as a company consistently uses the cash basis of accounting, generally accepted accounting principles allow its use.
• B)The use of the cash basis of accounting violates both the revenue recognition and expense recognition principles.
• C)The cash basis of accounting is objective because no one can be certain of the amount of revenue until the cash is received.
• D)As long as management is ethical, there are no problems with using the cash basis of accounting.

Understand the calculation of monthly interest rates and the effective rate on loans.

Develop proficiency in completing loan amortization schedules for different loan scenarios.

Gain insights into the impact of payment timings on finance charges in credit transactions.

Ability to solve for effective interest rates following different loan repayment schedules.

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Definitions:

Preconscious

Mental activities and information not currently in conscious awareness but that can be easily recalled or accessed.

Collective Unconscious

A concept in psychology introduced by Carl Jung, referring to the part of the unconscious mind which is derived from ancestral memory and experience and is common to all humankind.

Material

The substance or substances out of which a thing is or can be made.

Ego Ideal

Part of the psyche that consists of the ideal self or the standard by which one measures oneself against, often a driver for striving and self-improvement.