Under the accrual basis of accounting:
A)cash must be received before revenue is recognized.
B)net income is calculated by matching cash outflows against cash inflows.
C)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.
D)the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles.

Question

Quizplus · Accepted Answer

Under the accrual basis of accounting, revenues and expenses are recognized when they are earned or incurred, regardless of when cash transactions occur. This means that financial events are recorded in the period they occur, not when cash is exchanged.

Under the Accrual Basis of Accounting