The statement concerning accrual accounting that is true is:

Question

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Accrual accounting recognises income when the flow of economic benefits can be reliably measured, regardless of when cash is received. This approach provides a more accurate financial picture for the business by matching expenses with the related revenue earned in the same period. Option A is incorrect because profit is based on the accrual-based income and expenses, not cash inflows and outflows. Option C is also incorrect because the accrual approach provides a better measure of economic performance for most businesses. Option D is incorrect because income is recognised when it is earned, not when the payment is received.

The Statement Concerning Accrual Accounting That Is True Is