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, unearned revenue is recorded.

Question

Quizplus · Accepted Answer

Under the accrual basis of accounting, revenue is recorded when it is earned, regardless of when payment is received. So, if payment is received after delivery of goods or a service, the revenue is recorded when the good or service was delivered. An asset is recorded as an account receivable at the time of delivery.

Which of the Following Statements About Cash Basis Accounting and Accrual