When using accrual accounting, the receipt or payment of cash is irrelevant to deciding whether a business transaction should be recorded.

Question

Quizplus · Accepted Answer

Accrual accounting recognizes revenues and expenses when they are earned or incurred, regardless of when cash is received or paid. Therefore, cash transactions are not the basis for recording business transactions in accrual accounting.

When Using Accrual Accounting, the Receipt or Payment of Cash