Which of the Following Statements Is True

question 10

Multiple Choice

Which of the following statements is true?

• A)The finance manager uses the framework of the income statement to find the operating income of the company (an accounting measure),which is also the true cash flow from operations.
• B)In accrual-based accounting,revenue is recorded at the time of sale if the revenue has been received in cash.
• C)Three fundamental issues separate net income and cash flow: accrual-based accounting,noncash expense items,and interest expense.
• D)Generally accepted accounting principles (GAAP)in the United States do not allow the use of accrual-based accounting to record revenue.

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Definitions:

Nihilism

The view that nothing has any value or that there are no values.

Altruism

The thesis that one ought to act for the sake of the interests of others, rather than one’s own interests alone. See also ethical altruism; psychological altruism.

Luxury of Time

Refers to the privilege or condition of having ample time to pursue activities outside of basic survival needs or obligations.

Ecclesiastes

A book of the Hebrew Bible and the Christian Old Testament, reflecting on the meaning of life and the best way to live.