Which one of the following statements regarding the accrual and cash basis of accounting is true?
A)Using the accrual basis of accounting,if payment is received before delivery of a good or service,a revenue is recorded at the time the payment is received.
B)Using the accrual basis of accounting,if payment is received after delivery of a good or service,an asset is recorded at the time the good or service was delivered.
C)Using the cash basis of accounting,if payment is received before delivery of a good or service,net income is affected when goods or services are delivered.
D)Using the cash basis,if payment is received after delivery of a good or service,unearned revenue is recorded.

Question

Quizplus · Accepted Answer

Using the accrual basis of accounting, revenue is recognized when it is earned, regardless of when payment is received. Therefore, if payment is received after delivery of a good or service, an asset (such as accounts receivable) is recorded at the time the good or service was delivered, and revenue is recognized at that time. This is in contrast to the cash basis of accounting, where revenue is recognized only when payment is received.

Which One of the Following Statements Regarding the Accrual and Cash