Asked by Gabriel Platero on Jun 29, 2024
Verified
The accrual basis of accounting reflects the principle that revenue is recorded when it is earned,not when cash is received.
Accrual Basis
An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when the cash is actually received or paid.
Recorded When Earned
A principle indicating that revenue should be recognized in the accounting period in which it is earned, regardless of when the cash is received.
- Acquire knowledge about the basics of revenue recognition and the matching principle for expenses.
Verified Answer
CA
cesar amsellemJul 05, 2024
Final Answer :
True
Explanation :
The accrual basis of accounting recognizes revenue when it is earned, meaning that goods or services have been provided, regardless of whether cash has been received or not. This is in contrast to the cash basis of accounting, which only recognizes revenue when cash is received, regardless of whether the goods or services have been provided.
Learning Objectives
- Acquire knowledge about the basics of revenue recognition and the matching principle for expenses.
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