In practice, under accrual accounting, most income is recognised:
A)when the goods are delivered.
B)when the cash is received.
C)when the goods are produced.
D)when an order is received.

Question

Quizplus · Accepted Answer

Under accrual accounting, income is recognised when the goods or services are delivered or rendered, regardless of whether cash has been received or not. This is based on the matching principle, which requires that expenses be matched with the revenues they generate. Thus, revenue is recognised when it is earned, not when cash is received. Hence, option A is correct. Options B, C, and D are incorrect because they do not reflect the principles of accrual accounting.

In Practice, Under Accrual Accounting, Most Income Is Recognised