Accounting for IGCSE & O level - Advanced Principles (Section 3 - No. 5)
Which of the following best describes the accruals concept?
Revenues and expenses are recognized when cash is received or paid.
Revenues are recognized when earned, and expenses are recognized when incurred, regardless of cash flow.
Assets are recorded at their original cost.
Financial statements are prepared regularly.
Forklaring
The accruals concept emphasizes recognizing revenues and expenses when they are earned or incurred, which results in matching revenue to expenses in the appropriate accounting period.