Which of the statements below is FALSE?
A) The textbook uses the framework of the income statement to find the operating income of the company (an accounting measure) and then makes adjustments to find the true cash flow from operations.
B) In accrual-based accounting, revenue is recorded at the time of sale if the revenue has been received in cash.
C) Three fundamental issues separate net income and cash flow: accrual-based accounting, non-cash expense items, and interest expense.
D) Generally Accepted Accounting Principles (GAAP) in the United States allow the use of accrual accounting to record revenue.
Answer: B) In accrual-based accounting, revenue is recorded at the time of sale if the revenue has been received in cash.
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