Which of the Following Statements Is TRUE of Accrual Basis

question 170

Multiple Choice

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

• A) Accrual basis accounting is required 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) Accrual basis accounting always results in greater net income than cash basis accounting.

---

Definitions:

Sample Size

The number of observations or dataset elements selected from a population used in statistical analysis, crucial for determining the reliability of the study findings.

Two-Tail Test

A statistical hypothesis test in which the critical area of a distribution is two-sided and tests whether a sample is either greater than or less than a certain range of values.

Sample Proportions

The ratio of members within a sample that satisfy a given characteristic, often used to estimate the proportion of the characteristic in the entire population.

Standard Error

The standard deviation of the sampling distribution of a statistic, often used in constructing confidence intervals around a sample statistic to estimate the population parameter.