Which of the Following Statements Is True About the Accrual

question 126

Multiple Choice

Which of the following statements is true about the accrual basis of accounting?

• A) The timing of cash receipts and disbursements is emphasized.
• B) A minimal amount of record keeping is required in accrual basis accounting compared to cash basis.
• C) This method is used less frequently by businesses than the cash method of accounting.
• D) Revenues are recognized in the period the performance obligation is satisfied, regardless of the time period the cash is received.

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Definitions:

Down Payment

An initial payment made when purchasing an item on credit, particularly real estate, often expressed as a percentage of the purchase price.

Annual Interest Rate

The annual interest rate is the percentage of principal charged by the lender for the use of its money over one year.

Down Payment

An initial upfront partial payment for the purchase of expensive items/services such as a home or a car.

Annual Payments

Payments made once a year, often related to loans, leases, or insurance policies.