Which of the following are differences in the accrual method and cash-basis method of accounting?
A) Accrual accounting is required by generally accepted accounting principles.
B) Accrual accounting records expenses when incurred. Cash-basis accounting records expenses when cash is paid.
C) Accrual accounting records revenue when services are rendered. Cash-basis accounting records revenue when cash is received.
D) All of the above are true.

Question

Quizplus · Accepted Answer

All of the statements provided are true differences between the accrual method and cash-basis method of accounting. Accrual accounting is indeed required by generally accepted accounting principles (GAAP), records expenses when they are incurred regardless of when cash is paid, and records revenue when services are rendered, not when cash is received. Cash-basis accounting, on the other hand, records expenses and revenue only when cash is paid or received, respectively.

Which of the Following Are Differences in the Accrual Method