Select the one term that best fits each definition.
-Reporting income when the cash is received and expenses when the cash is paid.
A) accrual basis of accounting
B) adjusting entries
C) adjustments
D) balance sheet
E) cash basis of accounting
F) fiscal period
G) fiscal year
H) income statement
I) net income
J) net loss
K) prepaid expense
L) trial balance
M) work sheet

Question

Quizplus · Accepted Answer

The cash basis of accounting records income when the cash is received and expenses when the cash is paid, distinguishing it from the accrual basis of accounting, which records income when it is earned and expenses when they are incurred, regardless of when cash is exchanged.

Select the One Term That Best Fits Each Definition