The Accrual Basis of Accounting

question 138

Multiple Choice

The accrual basis of accounting:

• A) Is generally accepted for external reporting because it is more useful than cash basis for most business decisions.
• B) Is flawed because it gives complete information about cash flows.
• C) Recognizes revenues when received in cash.
• D) Recognizes expenses when paid in cash.
• E) Eliminates the need for adjusting entries at the end of each period.

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Definitions:

Voluntary Action

Actions initiated and controlled by an individual's conscious choice, contrasting with involuntary or reflexive movements.

Broca's Area

A region in the frontal lobe of the dominant hemisphere of the brain linked to speech production and language processing.

Motor Representation

the neural basis of the planning and execution of movement, residing in the brain's motor cortex.

Temporal Lobe

A region of the brain located beneath the temples, involved in processing auditory information and encoding memories.