Which of the Following Is a Correct Statement About the Methods

question 137

Multiple Choice

Which of the following is a correct statement about the methods of accounting?

• A) Cash-basis accounting records revenues when they are earned.
• B) Cash-basis accounting records expenses only at the end of the month.
• C) GAAP requires accrual accounting.
• D) Accrual accounting records an expense when cash is paid.

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Definitions:

Diminishing Marginal Utility

The decrease in satisfaction or benefit from consuming each additional unit of a good or service.

Utilitarian Argument

A principle in ethics and economics that advocates for actions that maximize happiness or well-being for the largest number of people.

Minimum Wage Law

Legislation establishing the lowest hourly rate that employers can legally pay their employees.

Income Distribution

The way in which a country's total economic output is divided among its population, or the share of national income earned by each quintile or group of the population.