Using accrual accounting, revenues are recorded a. only if cash is received after the services are performed or products have been delivered to customers b. when a service has been performed or products have been delivered to customers without regard to when cash is received c. when cash is received without regard to when the services are performed or products have been delivered to customers d. when cash is received at the time services are performed or products have been delivered to customers

Question

Braxton Walton

Business

26 January, 09:17

Using accrual accounting, revenues are recorded a. only if cash is received after the services are performed or products have been delivered to customers b. when a service has been performed or products have been delivered to customers without regard to when cash is received c. when cash is received without regard to when the services are performed or products have been delivered to customers d. when cash is received at the time services are performed or products have been delivered to customers

+1

Answers (1)

Know the Answer?

Harper Mclaughlin · Answer 1

b. when a service has been performed or products have been delivered to customers without regard to when cash is received

Explanation:

In accrual accounting, revenues are recorded in the moment that the event that leads to them takes place, whether cash is received immediately after, or not.

In fact, the term accrued revenue defines revenue from a sale that has been completed but not yet received in cash.

For example, if a pizza delivery company sends 100 pizzas to a customer, but the customer will pay a month after, the revenue is still recorded in the accounting journal even if it the cash will only flow a month later.