Which Is the Correct Statement Concerning a Chart of Accounts

question 40

Multiple Choice

Which is the correct statement concerning a chart of accounts?

• A) The accounts are listed in alphabetical order.
• B) It is drawn up at the commencement of a business.
• C) It is similar for most businesses.
• D) It is a list of accounts with their current balances.

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Definitions:

Revenue Recognition

The accounting principle that determines the specific conditions under which income becomes realized or earned as revenue.

Quality Of Income Ratio

A financial metric assessing the proportion of income that is realized in cash, indicating the reliability of reported earnings.

Operating Activities

Business actions that relate directly to the production, sale, and delivery of a company’s products or services, reflected in the cash flow statement.

Cash Flow

The total amount of money being transferred into and out of a business, affecting the company's liquidity.