Which of the Following Statements Is True

question 45

Multiple Choice

Which of the following statements is true?

• A)The deferral method of accounting generally results in a lower level of revenue than the restricted fund method.
• B)The deferral method of accounting generally results in a higher level of revenue than the restricted fund method.
• C)The deferral method of accounting generally results in a higher level of revenue than the restricted fund method only if capital asset amortization is involved.
• D)The deferral method of accounting results in the same amount of revenue as the restricted fund method.

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Definitions:

Private Cost

Expenses borne by individuals or enterprises as a result of their own production or consumption decisions, not including externalities.

Contingent Environmental Costs

Costs that may occur depending on the outcome of a future event related to the environment, such as cleanup costs for pollution or fines for non-compliance with environmental regulations.

Relationship and Image Costs

Expenses incurred to build and maintain relationships with customers and to enhance the company's image and brand.

Oil-spill Cleanup

The process of removing or mitigating the impact of oil spilled into an environment, typically involving physical, chemical, and biological methods.