Models Must

question 84

Multiple Choice

Models must

• A) be able to yield useable predictions.
• B) be totally realistic in every detail.
• C) be a complete reproduction of the real world.
• D) include every relationship that exists.

---

Definitions:

Loss

Refers to the decrease in economic benefits during an accounting period, which typically includes expenses exceeding income.

Sale of Equipment

The process of selling off business equipment, often recognized as a financial transaction that can result in a gain or loss in accounting records.

Direct Method

A cash flow statement reporting approach that presents major classes of gross cash receipts and payments, providing a clearer view of cash flows from operating activities.

Accrual Basis

An accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when cash is exchanged.