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Question 1: Which of the following statements concerning accrual accounting is correct?
(a) Expenses are recognised in the period in which the consumption of costs can be measured in a faithful, verifiable manner.
(b) Profit is the excess of cash inflows from income over cash outflows for expenses.
(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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