The gathering of related revenues and expenses into the same period,regardless of when they were incurred,is:
A) cash-basis accounting.
B) market-value accounting.
C) book-value accounting.
D) accrual accounting.

Question

Quizplus · Accepted Answer

Accrual accounting is the method of recognizing revenues and expenses when they are earned or incurred, regardless of when the money is actually received or paid. This ensures that financial statements accurately reflect the company's financial position and performance for a given period. Cash-basis accounting, on the other hand, records revenues and expenses only when cash is exchanged, which may not provide an accurate picture of a company's financial health. Market-value and book-value accounting are not related to the timing of revenue and expense recognition.

The Gathering of Related Revenues and Expenses into the Same