Which of the following statements is true about the accrual basis of accounting?
A) The timing of cash receipts and disbursements is emphasized.
B) A minimal amount of record keeping is required in accrual basis accounting compared to cash basis.
C) This method is used less frequently by businesses than the cash method of accounting.
D) Revenues are recognized in the period the performance obligation is satisfied, regardless of the time period the cash is received.

Question

Quizplus · Accepted Answer

The accrual basis of accounting recognizes revenues in the period that the performance obligation is satisfied, regardless of when the cash is received or disbursed. This method requires more extensive record keeping than the cash basis, and is more commonly used by businesses. Timing of cash receipts and disbursements is not emphasized in the accrual basis.

Which of the Following Statements Is True About the Accrual