Which of the following is true of accrual basis accounting?
A) Expenses are recognized either when they are incurred or cash is paid.
B) Revenue is recognized when a customer pays cash.
C) Expenses are recognized when they are incurred.
D) Revenue is recognized when a customer pays cash or shows interest to purchase the product or service.

Question

Quizplus · Accepted Answer

Accrual basis accounting recognizes revenue and expenses when they are incurred, not when cash is received or paid. This provides a more accurate picture of financial performance and obligations.

Which of the Following Is True of Accrual Basis Accounting