Which of the following statements about accrual-basis accounting is true? A : Accrual-basis accounting recognizes expenses when they are incurred. B : Accrual-basis accounting follows the fiscal year assumption. C : Accrual-basis accounting recognizes revenues when they are received in cash. D : Accrual-basis accounting is optional under generally accepted accounting principles.

Question

Brenna Holloway

Social Studies

30 October, 08:59

Which of the following statements about accrual-basis accounting is true? A : Accrual-basis accounting recognizes expenses when they are incurred. B : Accrual-basis accounting follows the fiscal year assumption. C : Accrual-basis accounting recognizes revenues when they are received in cash. D : Accrual-basis accounting is optional under generally accepted accounting principles.

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Answers (1)

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Zion Golden · Answer 1

Answer:A : Accrual-basis accounting recognizes expenses when they are incurred.

Explanation:

Accrual basis refers to the process of keeping record of transactions based on the revenue that are earned and incurred expenses.

An invoice from a customer has its revenue recorded through accrual basis.

The good thing about it, is revenues with their matching expenses can be put as one match which makes the transaction process goes efficiently.