Which of the Following Statements About Accrual Basis Accounting Is

question 65

Multiple Choice

Which of the following statements about accrual basis accounting is correct?

• A)If a company uses accrual basis accounting,the company should not record revenue until payments are actually received.
• B)If a company uses accrual basis accounting,the company should record expenses in the same period as the revenues they generate.
• C)IFRS does not allow accrual basis accounting for external reporting of income.
• D)The items reported on the income statement continue to have an impact beyond the current period,whereas the items reported on the balance sheet impact just the current period.

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Definitions:

Budget Committee

A group responsible for developing and monitoring an organization's financial plan, including income and expenditures.

Management's Budgeting Goals

The financial and operational targets set by a company's management during the budgeting process.

Accounting Department

The division within a company that is responsible for managing financial transactions, records, and statements.

Service Firm

A business that provides intangible products or services to consumers or other businesses rather than physical goods.