Adjustments Are Necessary Only If

question 172

Multiple Choice

Adjustments are necessary only if

• A)the cash basis of accounting is used for all accounting periods.
• B)cash receipts and payments occur before or after the point in time when revenues and expenses should be recognized under the accrual basis of accounting.
• C)management reports its adjustments on the statement of cash flows.
• D)the company reports revenue in the same period cash is collected.

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Definitions:

Economic Profit

The difference in total funds acquired and total expenditures, both straightforward and oblique, for a corporation.

Pure Monopolist

A market structure characterized by a single seller selling a unique product with no close substitutes, having complete control over its price.

Maximize Profits

The goal of increasing a firm's net income by effectively managing costs, pricing, production, and sales strategies.

Minimize Losses

Strategies or actions taken to reduce the amount of money or resources wasted or not gained in operations or transactions.