Which of the following statements about Accrual Accounting is correct? 1 point Accrual Accounting is simple but does not reflect
economic reality. Accrual Accounting requires managers’ judgement and does not reflect economic reality. Accrual Accounting is simple and reflects economic reality. Accrual Accounting requires managers’ judgement and reflects economic reality. 6. Question 6 Employees of a firm a
The statements about Accrual Accounting that is correct is:
Accrual Accounting requires managers’ judgement and reflects economic reality.
Explanation:
Unlike the cash basis of accounting that records transactions when cash is exchanged, the accrual basis of accounting tries to reflect economic reality and events rather than the exchange of cash. In this attempt, business transactions are recorded when they occur and in the period they occur and relate to rather than when cash is received or paid. Therefore, professional judgement is required. Many accounting estimates have to be made when using the accrual basis of accounting unlike the cash basis.
According to the law of supply, it states that there is a positive relationship between the price of a commodity and the quantity supplied of a commodity. This means that as the price of a commodity increases, as a result the quantity supplied of that commodity increases.
Therefore, any change occur in the prices of a commodity will affect the quantity supplied of a commodity not supply of a commodity.
The Question is incomplete. the question requires us to calculate minimum number of customers required to cover costs of promotions, to calculate the minimum number of customers required we need a price per customer. let us assume the price $6