Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 46 - No. 36)
Which of the following best describes the term 'accrual accounting'?
Accounting method that only records cash transactions.
Accounting method that recognizes revenues when earned and expenses when incurred, regardless of cash flow.
Accounting method used only by large corporations.
A method of recording the total cost of a project.
Explanation
Accrual accounting recognizes revenue and expenses when earned and incurred, not when cash changes hands.
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