When Converting an Income Statement from a Cash Basis to an Accrual

question 106

Multiple Choice

When converting an income statement from a cash basis to an accrual basis, which of the following is incorrect?

• A) An adjustment for depreciation reduces net income.
• B) A decrease in salaries payable decreases net income.
• C) A reduction in prepaid expenses decreases net income.
• D) An increase in accrued payables decreases net income.

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Definitions:

Pons

A part of the brainstem that plays a crucial role in controlling breathing, communication between different parts of the brain, and sensations such as hearing.

Midbrain

The middle portion of the brainstem that plays an important role in motor movement, particularly movements of the eye, and in auditory and visual processing.

Ascending Track

A progression or sequence that moves upward or increases in scale or importance.

Spinal Cord

A long, thin, tubular bundle of nervous tissue and support cells that extends from the brainstem to the lumbar region, enabling neural connections between the brain and the rest of the body.