The cash basis of accounting is an accounting system in which revenues are recorded when cash is received and expenses are recorded when cash is paid.

Question

Quizplus · Accepted Answer

The cash basis of accounting only recognizes transactions when cash is exchanged, regardless of when the revenue was earned or the expenses were incurred. This differs from the accrual basis of accounting, which recognizes revenues and expenses when they are earned or incurred, regardless of when cash is received or paid.

The Cash Basis of Accounting Is an Accounting System in Which