The Accrual Basis of Accounting Reflects the Understanding That the Economic

question 99

True/False

The accrual basis of accounting reflects the understanding that the economic effect of revenue generally occurs when it is earned, not when cash is received.

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Definitions:

Good Faith

An honest intention to act without taking unfair advantage over another party in a transaction.

Commercially Reasonable Manner

A standard requiring that actions taken in a business context comply with what a reasonable person would consider appropriate and fair in the same circumstances.

Merchant

An individual or company engaged in the buying and selling of goods or services in commerce, especially one dealing in a specific commodity or operating in a particular sector.

Special Knowledge

Extraordinary or advanced understanding and information in a particular field or subject, beyond that of the average person.