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.
A)(1)and (4).
B)(2)and (3).
C)(1)and (3).

Question

Quizplus · Accepted Answer

For accrual-basis accounting, revenues are recorded when earned (1) and expenses are recorded when incurred (not when cash is paid) (3). For cash-basis accounting, revenue is recorded when cash is received (3) and expenses are recorded when cash is paid (not when benefit is received) (2).

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