Which of the Following Statements About the Cash Basis of Accounting

question 228

Multiple Choice

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

• A) It can lead to a distorted view of the company's financial performance.
• B) It is the only acceptable method for external reporting.
• C) It reports revenues when earned and expenses when incurred.
• D) It is used when cash is paid at the same time as the cost is incurred, but is not used when cash is paid before the expense is incurred.

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Definitions:

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Political leaders from the Southern United States, often associated historically with the promotion of states' rights and the defense of slavery.

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The highest judicial court in a country or state, often having the final say in legal disputes and constitutional matters.

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Relating to, or according with a constitution, which is a set of fundamental principles or established precedents governing a state or other organization.