Under the accrual system, revenue is recognized when cash is paid.

Accrual System

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when cash is exchanged.

Revenue

The complete sum of earnings derived from selling goods or offering services that are central to a company's core business.

Understand the accrual accounting principle including revenue recognition and expense recording.

Verified Answer

Final Answer :

False

Explanation :

Under the accrual system, revenue is recognized when it is earned, not necessarily when cash is received.

Learning Objectives

Understand the accrual accounting principle including revenue recognition and expense recording.