Fred, a financial accountant at a multinational company, is asked by his supervisor to find out the exact income the company earns from the sale of its products over the next five weeks. To do this, for the next five weeks, Fred matches the revenue earned from the sale of the company's products and matches the expenses incurred by the company to the revenue they help produce. In this scenario, which of the following has Fred used to get the required information?
A) Accrual-basis accounting
B) Horizontal analysis
C) Liquidity index
D) Static analysis

Question

Quizplus · Accepted Answer

Fred is using accrual-basis accounting, which involves matching revenues with the expenses incurred to generate those revenues, providing a more accurate picture of a company's financial performance over a specific period.

Fred, a Financial Accountant at a Multinational Company, Is Asked