The _______________ requires that revenue is recorded when it is received in cash and expenses are recorded when they are paid in cash.
A) accrual basis of accounting
B) cash basis of accounting
C) hybrid basis of accounting
D) GAAP basis of accounting

Question

Quizplus · Accepted Answer

The cash basis of accounting requires revenues and expenses to be recorded when cash is received or paid out, respectively. This method does not account for accounts receivable, accounts payable, or other non-cash transactions. The use of the cash basis is simpler than the accrual basis, but it may not provide an accurate representation of a company's financial performance.

The _______________ Requires That Revenue Is Recorded When It Is