Natalya is confused about the difference between cash-basis and accrual-basis accounting. So you tell her that the:
A) cash method is easier to use.
B) cash method matches revenue and expenses better.
C) point of recognition of revenue and expenses is different.
D) cash method involves less record keeping.

Question

Quizplus · Accepted Answer

The point of recognition of revenue and expenses is different between cash-basis and accrual-basis accounting. Cash-basis accounting records revenue and expenses when cash is received or paid, while accrual-basis accounting records revenue and expenses when they are earned or incurred, regardless of when cash is received or paid.

Natalya Is Confused About the Difference Between Cash-Basis and Accrual-Basis