Which of the following is true of an accrual?
A) It is normally the result of cash being received or paid before the revenue is earned or the expense is incurred.
B) It is initially recorded as an asset but becomes an expense over time.
C) It is initially recorded as a liability but become revenue over time.
D) It is normally the result of cash being received or paid after revenue has been earned or an expense has been incurred.

Question

Quizplus · Accepted Answer

An accrual is a transaction that occurs before the related revenue is earned or the expense is incurred, and it is typically recorded as a liability or asset until it is earned or incurred. Thus, in the case of an accrual, cash is usually received or paid after the revenue has been earned or the expense has been incurred. Therefore, option D is the correct answer.

Which of the Following Is True of an Accrual