The accrual basis of accounting recognizes the impact of transactions on the financial statements in the period when _____.
A)revenues are earned and expenses are incurred
B)cash is received or disbursed
C)the transaction occurs
D)the accounting equation is decreased

Question

Quizplus · Accepted Answer

The accrual basis of accounting recognizes revenues when they are earned (i.e. goods or services are delivered to customers) and expenses when they are incurred (i.e. goods or services are received from suppliers), regardless of when cash is received or disbursed. Therefore, choice A is the most accurate answer.

The Accrual Basis of Accounting Recognizes the Impact of Transactions