Which of the Following Statements About Cash Basis Accounting and Accrual

question 32

Multiple Choice

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

• A) Net income is generally larger under accrual basis accounting than cash basis accounting.
• B) GAAP does not require the use of accrual basis accounting for external reporting.
• C) Accrual basis accounting and cash basis accounting will always produce the same amount of net income.
• D) Accrual basis accounting provides a better measure of operating performance than cash basis accounting.

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Definitions:

Saccades

Rapid, abrupt movements of the eyes that change the point of fixation.

Transduction

The process of converting one form of energy into another, as in sensory processing or in the genetic alteration of bacteria by viruses.

Lens Accommodation

The process by which the eye's lens changes shape to focus near or far objects on the retina for clear vision.

Optic Disk

The point in the back of the eye where the optic nerve connects to the retina, devoid of photoreceptors.