The accountant recognizes revenues and expenses on
A) an expense basis.
B) an accrual basis.
C) a revenue basis.
D) a cash basis.

Question

Quizplus · Accepted Answer

The accrual basis of accounting recognizes revenues and expenses when they are earned or incurred, regardless of when the cash is actually received or paid out. This is the most accurate and widely used method for financial reporting purposes. Option A (expense basis) and D (cash basis) are not consistent with generally accepted accounting principles, and option C (revenue basis) is not a recognized basis of accounting.

The Accountant Recognizes Revenues and Expenses on