Under the accrual basis of accounting:

Question

Quizplus · Accepted Answer

Under the accrual basis of accounting, revenues and expenses are recognized when they are earned or incurred, regardless of when the cash is actually received or paid. This principle is reflected in choice C, which accurately describes the accrual basis by stating that financial events are recognized in the period they occur, not necessarily when cash transactions happen. Choices A, B, and D describe characteristics of the cash basis of accounting, not the accrual basis.

Under the Accrual Basis of Accounting