Asked by Oscar Colon on Jun 04, 2024
Verified
________ basis accounting means that revenues are recognized when cash is received and that expenses are recorded when cash is paid.________ basis accounting means that the financial effects of revenues and expenses are recorded when earned or incurred.
Cash Basis Accounting
A financial recording approach where earnings and outlays are only acknowledged upon the receipt or payment of cash.
Accrual Basis Accounting
A financial recording system in which earnings and expenditures are logged when they happen, not necessarily when the payment is made or received.
- Identify the differences among diverse revenue and expense categories and understand their acknowledgment criteria.
- Understand the significance of following accounting principles, including the matching and revenue recognition principles.
Verified Answer
ZK
Learning Objectives
- Identify the differences among diverse revenue and expense categories and understand their acknowledgment criteria.
- Understand the significance of following accounting principles, including the matching and revenue recognition principles.