The Accrual Basis of Accounting

question 208

Multiple Choice

The accrual basis of accounting:

• A)Is generally accepted for external reporting since it is more useful for most business decisions.
• B)Is flawed because it gives complete information about cash flows.
• C)Recognizes revenues when received in cash.
• D)Recognizes expenses when paid in cash.
• E)Eliminates the need for adjusting entries at the end of each period.

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Definitions:

Polarity

The property of having distinct and opposite charges or directions.

Molecule

The smallest particle of a chemical substance that retains its chemical properties, consisting of one or more atoms bonded together.

Neutral

A term typically referring to a state of neutrality where there is no net charge, bias, or expressed preference.

Compound

Molecule that has atoms of more than one element.