Which of the Following Statements Is True

Multiple Choice

Which of the following statements is true?

A) Accrual-based net income can be manipulated because it is based on estimates.
B) Cash flows are easily manipulated because they are based on estimates.
C) Accrual-based net income is not easily manipulated because valuation for such items as bad debts and inventory are precise and based on objectively verifiable information.
D) Cash flows are not easily manipulated because they are generated by internal transactions and do not involve external parties.