Which of the Following Statements Is True of Accrual Basis

question 57

Multiple Choice

Which of the following statements is true of accrual basis accounting?

• A)Accrual basis accounting is allowed by Generally Accepted Accounting Principles (GAAP).
• B)Accrual basis accounting records expenses only when cash has been paid for them.
• C)Accrual basis accounting records revenue only when cash is received.
• D)It always results in greater net income than cash basis accounting.

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Definitions:

Acceptance

The agreement to the terms of an offer, thereby creating a contract.

Swimming Scholarship

A financial award given to a student based on their excellence in swimming, often to support their education while they compete in the sport.

Revocation

The act of withdrawing, cancelling, or repealing a law, order, or agreement.

Acceptance

In contract law, the affirmative response by an offeree to an offer, leading to the formation of a contract.