Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 19 - No. 41)
What does the accrual basis of accounting recognize?
Cash receipts and payments only.
Revenues when cash is received, expenses when cash is paid.
Revenues when earned and expenses when incurred.
Revenue earned in a period
Explanation
The accrual basis of accounting recognizes revenues when earned and expenses when incurred, regardless of the timing of cash flows.
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