Which of the following statements is correct?

Question

Quizplus · Accepted Answer

Both statements are correct. Under the accrual basis of accounting, revenue is recorded when it is earned regardless of when it is received, and expenses are recorded when they are incurred even if they are paid for later. This method of accounting is considered to be more accurate in matching revenues and expenses to the period in which they occur, and is required by generally accepted accounting principles (GAAP) for most businesses.

Which of the Following Statements Is Correct