The cash basis recognizes revenue when cash is received and expenses when cash is paid.

Question

Quizplus · Accepted Answer

The statement accurately describes the cash basis method of accounting, which is commonly used by small businesses and individuals. However, it is important to note that this method may not accurately reflect the financial health or performance of a company, as it does not take into account accrued revenue or expenses that have not yet been paid.

The Cash Basis Recognizes Revenue When Cash Is Received and Expenses