The System of Preparing Financial Statements Based on Recognizing Revenues

question 161

Multiple Choice

The system of preparing financial statements based on recognizing revenues when the cash is received and reporting expenses when the cash is paid is called:

• A) Accrual basis accounting.
• B) Operating cycle accounting.
• C) Cash basis accounting.
• D) Revenue recognition accounting.
• E) Current basis accounting.

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Definitions:

Reported

A term commonly used to indicate that certain information, incidents, or findings have been communicated to authorities or made known through various media.

Compared

Analyzed or examined for similarities and differences between two or more items.

Monotheistic

The belief in the existence of only one god that is all-powerful and the creator of the universe, distinguishing religions like Christianity, Islam, and Judaism.

All-Powerful

Possessing complete, unlimited, or universal power and authority.