An accountant records a transaction when cash is paid or received under which basis of accounting?
A)Cash
B)Accrual
C)Deferral
D)Prepaid
E)Cost recovery

Question

Quizplus · Accepted Answer

The cash basis of accounting records transactions when cash is either paid or received. This means that revenue and expenses are only recorded when cash changes hands, regardless of when the actual goods or services were exchanged. It is a simple and straightforward method of accounting but can result in distorted financial statements if there are significant time lags between when revenue is earned and when cash is received or when expenses are incurred and when cash is paid.

An Accountant Records a Transaction When Cash Is Paid or Received