When are revenues and expenses recognized in the same accounting period that cash receipts and payments occur?

Question

Quizplus · Accepted Answer

Under the cash basis of accounting, revenues and expenses are recognized in the same accounting period as the cash receipts and payments occur. This method is based on actual cash transactions and does not take into account accounts receivable or accounts payable. As a result, it is typically used by small businesses or individuals who do not have significant accounting requirements.

When Are Revenues and Expenses Recognized in the Same Accounting