Disregarding Cash Flows with Owners,over Sufficiently Long Periods of Time,net

question 76

Multiple Choice

Disregarding cash flows with owners,over sufficiently long periods of time,net income equals:

• A) revenues minus dividends and expenses
• B) assets minus liabilities
• C) stockholders' equity
• D) cash inflows minus cash outflows

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Definitions:

Accrual Basis

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when cash transactions occur.

Cash Basis

An accounting method where revenues and expenses are recognized only when cash is received or paid.

Income Taxes Payable

Liabilities owed to the government for income taxes, not yet paid by the company.

Income Tax Expense

The total amount of income tax a company is obligated to pay to the government, reported on its income statement.