Which of the following statements are incorrect: i) Net income represents cash available to pay dividends ii) Net income represents sales minus operating expenses iii) Positive net income increases a company's cash balance iv) Net income represents income that may be distributed to its owners O i, ii, iii & iv O i, iii & iv O ii, iii & iv O i, ii & iii

Which of the following statements are incorrect: i) Net income represents cash available to pay dividends ii) Net income represents sales minus operating expenses iii) Positive net income increases a company's cash balance iv) Net income represents income that may be distributed to its owners O i, ii, iii & iv O i, iii & iv O ii, iii & iv O i, ii & iii

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter3: Accrual Accounting

Section: Chapter Questions

Problem 1MCQ: Which of the following statements is true? Under cash-basis accounting, revenues are recorded when a...

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Which of the following statements is true? Under cash-basis accounting, revenues are recorded when a company satisfies its performance obligations and expenses are recorded when incurred. Accrual-basis accounting records both cash and noncash transactions when they occur. Generally accepted accounting principles require companies to use cash-basis accounting. The key elements of accrual-basis accounting are the revenue recognition principle, the expense recognition principle, and the historical cost principle.
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