Which of the following is not true?
A)Accrual accounting measures the effects of transactions and events in the periods when they occur.
B)Cash-basis accounting recognizes only cash receipts and disbursements.
C)Under accrual accounting, firms recognize revenues when an arrangement satisfies the revenue recognition criteria, increasing net assets but not necessarily cash at the time of revenue recognition.
D)Under accrual accounting, firms recognize expenses when an arrangement satisfies the expense recognition criteria, decreasing net assets but not necessarily cash at the time of expense recognition.
E)Accrual accounting often uses the amount of cash received or paid in some period to measure the amount of revenues and expenses recognized during the current period, and the timing of revenue and expense recognition coincides with the timing of cash receipts and disbursements.

Question

Quizplus · Accepted Answer

Option E is not true because accrual accounting does not always use the amount of cash received or paid to measure the amount of revenues and expenses recognized during the current period. Instead, it recognizes revenues and expenses based on when they are earned or incurred, regardless of the timing of cash receipts and disbursements.

Which of the Following Is Not True