Under the accrual basis of accounting

Question

Quizplus · Accepted Answer

Under the accrual basis of accounting, events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received. This means that revenue is recognized when it is earned, even if cash has not yet been received, and expenses are recognized when they are incurred, even if cash has not yet been paid. This results in a more accurate reflection of a company's financial performance.

Under the Accrual Basis of Accounting