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.

---

Definitions:

Appropriate Reagents

Correctly chosen chemicals used to bring about a desired chemical reaction, based on the necessary conditions and outcomes.

Alkene

Unsaturated hydrocarbons containing at least one double bond between carbon atoms, part of the family of olefins.

Enantiomers

Molecules that are mirror images of each other and are non-superimposable.

Asymmetric Carbon Atoms

Atoms of carbon in a molecule that are bonded to four different groups, leading to chirality or optical activity.