Which of the Following Statements About Accrual Basis Accounting Is

question 159

Multiple Choice

Which of the following statements about accrual basis accounting is not correct?

• A)It uses the revenue recognition principle.
• B)It uses the expense recognition principle.
• C)It is required for external accounting reports.
• D)It requires the timing of cash receipts be in the same period as revenues are recognized.

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Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been charged against an asset over its life up to a specific date.

Impairment Losses

Losses recognized when the carrying amount of an asset, or a cash-generating unit, exceeds its recoverable amount.

Productive Life

is the period during which an asset remains functional and can produce goods or services that are useful for the entity owning it.

Physical Nature

The tangible attributes or qualities of an asset, product, or substance, often influencing its valuation, use, and management.