Which of the following is not an application of accrual accounting?
A)Recording advertising fees earned at the time the work is done.
B)Adjusting unearned advertising fees to the proper balance at the end of the month.
C)Recording advertising fees earned at the time the cash payment is received.
D)Recording telephone expense in the accounting period covered by the monthly bill.

Question

Quizplus · Accepted Answer

Accrual accounting records revenue and expenses when they are earned or incurred, regardless of when cash is received or paid. Option C records revenue only when the cash payment is received, which is not consistent with accrual accounting. The other options A, B, and D all reflect accrual accounting principles by recognizing revenue and expenses when they are earned or incurred.

Which of the Following Is Not an Application of Accrual