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Which of the Following Statements Regarding Cash and Accrual Accounting

Question 29

Multiple Choice

Which of the following statements regarding cash and accrual accounting is true?


A) If payment is received at the same time a service is produced and sold,there is no difference between how cash and accrual accounting record the transaction.
B) The cash basis of accounting works best when a lengthy delay exists between the timing of cash flows and the underlying business activities to which they relate.
C) If a company receives a bill for rent for the period and decides to delay payment,the rent will not be recorded as an expense according to the accrual model of accounting.
D) The cash basis of accounting would record unearned revenue if a company received a deposit in advance of services to be rendered by the company.

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