Which of the following statements best defines the transactional approach?
A)The transactional approach is justified by the qualitative characteristic of relevance.
B)The transactional approach is conceptually identical to the capital maintenance concept.
C)Under the transactional approach, assets and liabilities are generally valued at the historical cost.
D)The transactional approach follows the accrual basis of accounting.

Question

Quizplus · Accepted Answer

The transactional approach follows the accrual basis of accounting, which means that revenues and expenses are recognized when they are earned or incurred, regardless of when cash is received or paid.

Which of the Following Statements Best Defines the Transactional Approach