Under accrual accounting, revenues and expenses should be recorded in the same period to which they relate.

Question

Quizplus · Accepted Answer

Accrual accounting follows the matching principle, which requires that revenues and expenses should be recognized in the same period to show the accurate financial position of a business. This principle helps to avoid any distortion in the financial statements by ensuring that both revenue and expenses are recorded in the same accounting period when they are earned or incurred, respectively, regardless of when the cash moves- in or out of the business.

Under Accrual Accounting, Revenues and Expenses Should Be Recorded in the Same