Which of the following concepts best characterizes the accrual basis of accounting?
A)Conservatism
B)Matching
C)Understandability
D)Going concern
E)Unit of measurement

Question

Quizplus · Accepted Answer

The accrual basis of accounting is based on the matching concept, which requires that expenses be recognized in the period in which they generate revenues. This means that revenues and expenses are recorded when they are earned or incurred, regardless of when cash is received or paid. The matching principle is important for accurate measurement of a company's profitability and financial position.

Which of the Following Concepts Best Characterizes the Accrual Basis