Accrual accounting relates the financial effects of a company's transactions
A) so that the costs of nonoperational events are matched to the balance sheet in the period impacted
B) to the period in which they occur rather than to when the cash receipts or payment occurs
C) so that the revenue impact of every transaction in a period is properly reflected in the income statement
D) so that the impact of every transaction is reflected in the statement of cash flows

Question

Quizplus · Accepted Answer

Accrual accounting records the financial effects of transactions in the period in which they occur, regardless of when cash is exchanged. This ensures that financial statements reflect the economic activity of the period accurately, rather than just the cash transactions.

Accrual Accounting Relates the Financial Effects of a Company's Transactions