Which of the following is consistent with the cash-basis of accounting?
A) Recording a liability for a lawsuit the company is expected to lose
B) Recording bad debt expense when an account proves uncollectible
C) Recording salaries payable at the end of an accounting period
D) Recording revenue when earned

Question

Quizplus · Accepted Answer

Under cash-basis accounting, expenses are recorded when cash is paid. Recording bad debt expense when an account proves uncollectible aligns with this principle, as it reflects the actual cash flow impact.

Which of the Following Is Consistent with the Cash-Basis of Accounting