A personal income statement is prepared
A)on an accrual basis.
B)on a cash basis.
C)based on actual cash flows.
D)Both B and C.

Question

Quizplus · Accepted Answer

A personal income statement can be prepared on a cash basis or an accrual basis, but it is typically based on actual cash flows. This means that it reflects the actual amounts of money received and spent during a specific period, rather than simply projecting future income and expenses or recognizing revenue and expenses based on when they are incurred. Therefore, both options B (cash basis) and C (actual cash flows) are correct.

A Personal Income Statement Is Prepared