Under the cash basis of accounting, no adjustments are made for prepaid, unearned, and accrued items. true

Question

Yareli Joyce

Business

28 December, 01:39

Under the cash basis of accounting, no adjustments are made for prepaid, unearned, and accrued items. true

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Yuliana Wiley · Answer 1

That statement is true

Under a cash basis, we only acknowledge a transaction only after cash exchange.

Under prepaid, unearned, and accrued items, we already receive the assets, but we till haven't made the cash exchange, so no adjustment is needed.