Which assumption requires transactions to be recognised in the accounting reports when they occur and not when the cash is received or paid?
A) faithful representation.
B) accounting period.
C) accrual basis.
D) accounting entity.

Question

Quizplus · Accepted Answer

The accrual basis assumption requires that transactions should be recognized in the accounting reports when they take place, regardless of whether cash is received or paid. This means that revenues are recorded when earned, and expenses are recorded when incurred. The accounting period assumption refers to the time period over which financial statements are prepared. The faithful representation assumption requires that financial information should be complete, neutral, and free from material errors or bias. The accounting entity assumption states that the financial affairs of the business should be kept separate from the personal affairs of the owners or other entities.

Which Assumption Requires Transactions to Be Recognised in the Accounting