The approach to preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues is:
A)Cash basis accounting.
B)The expense recognition (matching)principle.
C)The time period assumption.
D)Accrual basis accounting.
E)Revenue basis accounting.

Question

Quizplus · Accepted Answer

The approach described in the question is the accrual basis of accounting, which recognizes revenues when they are earned and matches expenses to those revenues.

The Approach to Preparing Financial Statements Based on Recognizing Revenues