Which statement is true regarding accounting accruals?
A)The nature of accrual accounting is that accruals will reverse when cash cycles are complete.
B)Operating activities generally have relatively long cash cycles.
C)Financing and investing activities generally have relatively short cash cycles.
D)Errors or changes in accounting policy that affect non-current items like equipment will result in follow-through changes over a relatively short period.

Question

Quizplus · Accepted Answer

Accrual accounting involves recording revenues and expenses when they are incurred, regardless of when cash is exchanged. Accruals often reverse as actual cash transactions occur, aligning the accounting records with the cash flows.

Which Statement Is True Regarding Accounting Accruals