Which of the following statements is NOT true?
A) Judgements need to be made in determining profit.
B) Attempts are made to measure incomplete transactions.
C) The impact of transactions is recognised when cash is received or paid.
D) Estimates are made of certain balance sheet items.

Question

Quizplus · Accepted Answer

The impact of transactions is not always recognized when cash is received or paid. In accrual accounting, revenue and expenses are recognized when they are earned or incurred, regardless of the timing of cash flows. Therefore, it is possible for revenue to be recognized before cash is received or for expenses to be recognized before cash is paid.

Which of the Following Statements Is NOT True