Revenue is recorded when earned, and expenses are recorded only when paid.

Name: Revenue is recorded when earned, and expenses are recorded only when paid.
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Question

Quizplus · Accepted Answer

This statement is incorrect. Revenue is recorded when earned, regardless of whether or not it has been received. Similarly, expenses are recorded when incurred, regardless of whether or not they have been paid for yet. This is known as the accrual basis of accounting.

Revenue Is Recorded When Earned, and Expenses Are Recorded Only