Which of the Following Would Result in an Increase in Income

question 38

Multiple Choice

Which of the following would result in an increase in income under the accrual method of accounting, but would not result in an increase in income under the cash basis accounting?

• A)Purchase of supplies for cash
• B)Performance of services on account
• C)Use of supplies purchased earlier
• D)Receipt of cash for services that were performed earlier on account

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Definitions:

Noam Chomsky

An influential linguist and cognitive scientist known for his theory of generative grammar, significantly impacting the study of language and the mind.

Functional Fixedness

An intellectual prejudice that prevents a person from considering unconventional uses for an object, thereby limiting creative problem-solving capabilities.

Creative Solution

An innovative and effective response or method developed to address a problem or challenge.

Functional Fixedness

A cognitive bias that limits a person to use an object only in the way it is traditionally used, which can inhibit problem-solving and creativity.