For Each of the Following Statements,indicate Whether It Applies To

question 156

Essay

For each of the following statements,indicate whether it applies to:
the cash basis of accounting (cash basis)
the accrual basis of accounting (accrual basis)
both the cash and accrual basis of accounting (both)
neither the cash nor the accrual basis of accounting (neither).
Your response should be cash basis,accrual basis,both,or neither.
$$\begin{array} {|l | l | } \hline \text { Statement } & \text { Applies to } \\\hline \text { An easier method of accounting to } & \\\text { follow } & \\\hline \text { Provides a better picture of a } & \\\text { business's revenues and expenses } & \\\hline \text { Small businesses may use this } & \\\text { method } & \\\hline\end{array}$$

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Definitions:

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales, such as rent, salaries, or loan payments.

Marginal Cost

The added expense incurred by creating one more unit of a product or service.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the quantity of output produced.

Minimum

The lowest permissible limit or the least possible amount or degree of something.