What type of accounting records expenditures when an obligation is incurred (as one records a check when it is written, not when the bank actually makes payment) and records revenues when earned (for example, when taxes are due, not when the taxpayer actually pays)?
A)The Austrian school of accounting
B)Fund accounting
C)Accrual accounting
D)Time-phased accounting
E)Cost accounting

Question

Quizplus · Accepted Answer

Accrual accounting is the type of accounting that records expenditures when an obligation is incurred and records revenues when they are earned, regardless of when the payment or receipt of cash occurs. This method provides a more accurate picture of a company's financial performance by matching expenses with revenues in the same period.

What Type of Accounting Records Expenditures When an Obligation Is