On an accrual basis income statement, revenues and expenses always match the firm's cash flow.

Question

Quizplus · Accepted Answer

On an accrual basis income statement, revenues and expenses may not match the firm's cash flow as revenue is recognized when it is earned and expenses are recognized when they are incurred, regardless of when the cash is received or paid. This can result in a time lag between when revenue and expenses are recognized and when the corresponding cash inflows and outflows occur.

On an Accrual Basis Income Statement, Revenues and Expenses Always