Which of the following statements about cash basis accounting and accrual basis accounting is correct?
A)Using the accrual basis of accounting,if payment is received before delivery of goods or a service,revenue is recorded at the time the payment is received.
B)Using the accrual basis of accounting,if payment is received after delivery of goods or a service,an asset is recorded at the time the good or service was delivered.
C)Using the cash basis of accounting,if payment is received before delivery of goods or a service,net income is affected when goods or services are delivered.
D)Using the cash basis,if payment is received after delivery of goods or a service,deferred revenue is recorded.

Question

Quizplus · Accepted Answer

Accrual basis accounting reports revenues when they are earned and expenses when they are incurred.Under accrual basis accounting,if payment is received after delivery of goods or a service,an entry is made to increase Accounts Receivable,an asset,and increase the related revenue account.Cash basis accounting records revenues and expenses when cash is received and paid.

Which of the Following Statements About Cash Basis Accounting and Accrual