The totals at the end of the year in the revenue and expense accounts reflect
A)all the business conducted during the year
B)only the transactions completed during the year
C)all the transactions recorded during the year
D)only the transactions initiated during the year

Question

Quizplus · Accepted Answer

The totals at the end of the year in the revenue and expense accounts reflect all the transactions recorded during the year, including those that may have not been completed or initiated during the year. This is because the accrual basis of accounting recognizes revenue and expenses when they are incurred, not necessarily when cash is received or paid out. Therefore, all transactions that have been recorded and accrued during the year contribute to the final totals in the revenue and expense accounts.

The Totals at the End of the Year in the Revenue