Which of the Statements Below Is FALSE

question 7

Multiple Choice

Which of the statements below is FALSE?

• A)The textbook uses the framework of the income statement to find the operating income of the company (an accounting measure)and then makes adjustments to find the true cash flow from operations.
• B)In accrual-based accounting,revenue is recorded at the time of sale if the revenue has been received in cash.
• C)Three fundamental issues separate net income and cash flow: accrual-based accounting,noncash expense items,and interest expense.
• D)Generally Accepted Accounting Principles (GAAP)in the United States allow the use of accrual accounting to record revenue.

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Definitions:

Simultaneous Consumption

A characteristic of services that indicates they are consumed at the same time as they are produced.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the scale of production and the quantity of output increase.

Price Discrimination

A pricing strategy where a seller charges different prices for the same product or service to different consumers, based on market segments, capacity to pay, or purchasing contexts.

Monopoly Power

The ability of a monopolist to significantly control market price or exclude competition in a particular market.