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Questions and Answers
Which basis of accounting recognizes the effects of transactions when they occur, regardless of the timing of cash receipts or payments?
Which basis of accounting recognizes the effects of transactions when they occur, regardless of the timing of cash receipts or payments?
- Fund basis
- Cash basis
- Accrual basis (correct)
- Hybrid basis
What is the going concern basis of accounting focused on?
What is the going concern basis of accounting focused on?
- Preparation of tax returns
- Valuation of assets
- Forecasting cash flows
- Continuation of entity's operations in the foreseeable future (correct)
If an entity is planning to go into liquidation, what basis of accounting should be used?
If an entity is planning to go into liquidation, what basis of accounting should be used?
- Break-up basis (correct)
- Cash basis
- Accrual basis
- Going concern basis
Why is the going concern assumption important for the valuation of assets?
Why is the going concern assumption important for the valuation of assets?
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Under which basis would a transaction be recognized in the financial statements when it occurs, regardless of cash movements?
Under which basis would a transaction be recognized in the financial statements when it occurs, regardless of cash movements?
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