[amp_mcq option1=”Net income approach” option2=”MM approach” option3=”Operating approach” option4=”Traditional approach” correct=”option3″]<\/p>\n
The correct answer is: C. Operating approach.<\/p>\n
Arbitrage is a level processing technique introduced in the operating approach. It is a method of accounting for income that recognizes revenue when it is earned and expenses when they are incurred. This approach is based on the matching principle, which states that expenses should be matched with the revenues they generate.<\/p>\n
The net income approach is a method of accounting for income that recognizes revenue when it is realized and expenses when they are paid. This approach is based on the realization principle, which states that revenue should be recognized when it is realized in the form of cash or other assets.<\/p>\n
The MM approach is a method of accounting for income that recognizes revenue when it is earned and expenses when they are incurred, but it also allows for the deferral of certain expenses. This approach is based on the matching principle, but it also takes into account the time value of money.<\/p>\n
The traditional approach is a method of accounting for income that recognizes revenue when it is realized and expenses when they are paid, but it does not allow for the deferral of certain expenses. This approach is based on the realization principle, but it does not take into account the time value of money.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”Net income approach” option2=”MM approach” option3=”Operating approach” option4=”Traditional approach” correct=”option3″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-45454","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"\n