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Problem 1: Which of the following statements concerning accrual accounting is correct?
(a) Expenses are recognised in the period after which the consumption of costs can be measured in a faithful, verifiable manner.
(b) Expenses are recognised in the period in which the consumption of costs can be measured in a faithful, verifiable manner.
(c) Income from sales is recognised in the period when the cheque is cashed.
(d) For most businesses the cash approach gives a better measure of economic performance than does the accrual approach.
Financial Statement Analysis and Preparation
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