According to the _____ method of accounting, revenues are recognized when they are earned, and payment is reasonably assured.
A) accrualbasis
B) actuarial
C) managerial
D) last in, first out

Question

According to the _____ method of accounting, revenues are recognized when they are earned, and payment is reasonably assured.
A) accrual­basis
B) actuarial
C) managerial
D) last in, first out

Quizplus · Accepted Answer

The accrual-basis method of accounting recognizes revenues when they are earned, regardless of when payment is received. This method provides a more accurate picture of a company's financial performance than the cash-basis method, which only records revenues when payment is received. The actuarial method is a specific application of accounting used in insurance and finance, while managerial accounting is focused on internal decision-making and reporting. Last in, first out (LIFO) is a method of inventory valuation, not accounting for revenue recognition.

According to the _____ Method of Accounting, Revenues Are Recognized