Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 32 - No. 22)
Which of the following statements is true regarding the accrual basis of accounting?
Revenue is recognized when earned.
Expenses are recognized when incurred.
Cash payments are recognized.
Cash receipts are recognized.
Explanation
Accrual accounting focuses on revenues when earned and expenses when incurred, not necessarily when cash is received or paid.
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