The accrual basis of accounting recognizes
A) revenue when cash is received from customers
B) expenses when paid
C) revenue when all or a substantial portion is performed
D) revenue when contracts are signed

Question

Quizplus · Accepted Answer

The accrual basis of accounting recognizes revenue when all or a substantial portion is performed, regardless of when cash is received. This means that revenue is recognized when the work is completed or goods are delivered, regardless of when the customer pays the company. This method gives a more accurate representation of a company's financial performance and reflects the matching principle, which matches revenue with the expenses incurred to generate that revenue.

The Accrual Basis of Accounting Recognizes