Which of the Following Is Not a Characteristic of Accrual

question 151

Multiple Choice

Which of the following is not a characteristic of accrual basis of accounting?

• A) Revenues and expenses are reported in the period in which cash is received or paid
• B) Revenues are reported on the income statement in the period in which they are earned
• C) Accrual basis of accounting supports the matching concept
• D) Expenses are reported in the same period as the revenues to which they relate

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Definitions:

Fixed Cost Element

A cost that does not vary with the level of production or sales, such as rent, salaries, and insurance expenses.

Mixed Cost

A cost that contains both fixed and variable components and changes with the level of activity, but not proportionately.

CVP Analysis

Cost-Volume-Profit (CVP) analysis is a managerial accounting technique used to determine the effects of changes in costs and volume on a company's profits.

Variable

An element, feature, or factor that is likely to vary or change; used in various contexts, including mathematical equations and statistical models.