The Accrual Basis of Accounting

question 121

Multiple Choice

The accrual basis of accounting

• A) Is generally accepted for external reporting because it gives more useful information
• B) Is not acceptable because it gives incomplete information about cash flows
• C) Recognizes revenues when received
• D) Recognizes expenses when paid
• E) Eliminates the need for adjusting entries

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Definitions:

Refuting

The act of disproving a statement or argument by presenting evidence or logical reasoning.

Empirical Evidence

Refers to the information obtained through observation and documentation of patterns and behaviors rather than theories or beliefs.

Observation

The act of closely monitoring or noting phenomena as they occur naturally without interfering or manipulating the situation.

Experience

The process of gaining knowledge or skills through direct participation in events or activities.