When determining a firm's level of net income, accountants use
A) static based amounts.
B) the actual dollars coming in and going out.
C) accrual based amounts.
D) cash flows.

Question

Quizplus · Accepted Answer

Accountants use accrual based amounts when determining a firm's level of net income. This means that they recognize revenue when it is earned and expenses when they are incurred, regardless of when the cash is actually received or paid out. This provides a more accurate picture of a company's financial performance over a given period of time.

When Determining a Firm's Level of Net Income, Accountants Use