The manner in which we record transactions defines the difference between a cash basis accounting system or an accrual accounting system.

Question

Quizplus · Accepted Answer

This statement is true. In a cash basis accounting system, transactions are recorded only when cash is received or paid out. In an accrual accounting system, transactions are recorded when they occur, regardless of when cash is received or paid out.

The Manner in Which We Record Transactions Defines the Difference