Which of the Following Is True About Accrual-Basis Accounting

question 67

Multiple Choice

Which of the following is true about accrual-basis accounting?

• A) Income is generally larger with accrual-basis accounting.
• B) Accrual-basis accounting provides a better measure of performance.
• C) Accrual-basis accounting is not required by GAAP.
• D) Accrual-basis accounting and cash-basis accounting always produce the same results.

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Definitions:

Standard Deviations

A measure of the dispersion or variability within a set of numerical data, indicating how much variation there is from the average (mean).

Sample Averages

The mean value calculated from a sample set of data, representing the central tendency or typical value of that sample.

Mode

Mode refers to the most frequently occurring value in a set of data.

Regression Toward the Mean

A statistical phenomenon wherein extreme scores on one occasion tend to be closer to the average on subsequent testing.