Which of the following statements are correct? For accrual-basis accounting:
(1)record revenues when earned.
(2)record expenses when cash is paid.
For cash-basis accounting:
(3)record revenue when cash is received.
(4)record expenses when benefit is received.

Question

Quizplus · Accepted Answer

(1) Record revenues when earned is correct for accrual-basis accounting. 
(3) Record revenue when cash is received is correct for cash-basis accounting. 
(2) Record expenses when cash is paid is incorrect for accrual-basis accounting as expenses should be recorded when they are incurred, not necessarily when they are paid. 
(4) Record expenses when benefit is received is incorrect for cash-basis accounting as expenses should be recorded when they are incurred, not necessarily when the benefit is received.

Which of the Following Statements Are Correct? for Accrual-Basis Accounting