Which of the following statements about accrual basis accounting is not correct?
A)It uses the revenue recognition principle.
B)It uses the expense recognition principle.
C)It is required for external accounting reports.
D)It requires the timing of cash receipts be in the same period as revenues are recognized.

Question

Quizplus · Accepted Answer

The two basic accounting principles that determine when revenues and expenses are recognized under accrual basis accounting are called the revenue recognition and expense recognition principles.According to GAAP,the accrual basis is the only acceptable method for external reporting of income.All companies expect to receive cash in exchange for providing goods and services,but the timing of cash receipts does not dictate when revenues are recognized.

Which of the Following Statements About Accrual Basis Accounting Is