When the Amount of Revenue Collected in Advance Decreases During

question 1

Multiple Choice

When the amount of revenue collected in advance decreases during an accounting period:

• A) Accrual-basis revenues exceed cash collections from customers.
• B) Accrual-basis net income exceeds cash-basis net income.
• C) Accrual-basis revenues are less than cash collections from customers.
• D) Accrual-basis net income is less than cash-basis net income.

---

Definitions:

Priming

A psychological effect in which exposure to a stimulus influences a response to a later stimulus.

Crucial Item

An element deemed extremely important or essential in a particular context or situation.

Congruent

In agreement or harmony; matching or fitting together well.

Abstract Level

The degree to which an idea, statement, or concept is general, non-specific, and divorced from specific instances or practical application.