Which of the Following Regarding Accrual Versus Cash-Basis Accounting Is

question 41

Multiple Choice

Which of the following regarding accrual versus cash-basis accounting is true?

• A) The FASB believes that the cash basis is appropriate for some smaller companies,especially those in the service industry.
• B) The cash basis is less useful in predicting the timing and amounts of future cash flows of an enterprise.
• C) Application of the cash basis results in an income statement reporting only revenues.
• D) The cash basis requires a complete set of double-entry records.

---

Definitions:

Depression

A common and serious mood disorder that causes persistent feelings of sadness, hopelessness, and loss of interest in activities.

Rational Thinking

The process of making decisions based on logical reasoning and critical analysis, rather than emotions or irrational thoughts.

Cognitive Therapist

A mental health professional specializing in cognitive therapy, focusing on identifying and changing negative thought patterns to improve emotional well-being and behavior.

Behavior Therapies

Action therapies based on the principles of classical and operant conditioning and aimed at changing disordered behavior without concern for the original causes of such behavior.