To What Does Basis of Accounting Refer

question 4

Multiple Choice

To what does basis of accounting refer?

• A)whether an entity is trying to measure the excess of inflows over outflows
• B)how much cash an entity received in a particular reporting period
• C)the timing of recognition of assets,liabilities,revenues,and expenditures/expenses in financial statements
• D)the ownership of the assets,liabilities,and equities reported in a balance sheet

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Definitions:

Scrap Value

The anticipated value of an asset when it reaches the end of its functional lifespan, commonly utilized in figuring out depreciation.

Units-Of-Activity Method

A method of depreciation that provides for depreciation expense based on each unit of activity of a fixed asset.

Depreciable Cost

The total cost of a tangible asset minus its estimated salvage value, representing the amount subject to depreciation over the asset's useful life.

Estimated Output

The anticipated quantity of products or services that a business expects to produce over a certain period.