Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 18 - No. 43)

Which of the following is a characteristic of accrual accounting?

Revenues are recognized when cash is received.

Expenses are recognized when cash is paid.

Revenues are recognized when earned and expenses are matched to revenue.

Transactions are recorded only when cash changes hands.

Accrual accounting focuses on recognizing revenues when earned and expenses when incurred, matching them in the same period.