Using Accrual Accounting, Expenses Are Recorded and Reported Only

question 24

Multiple Choice

Using accrual accounting, expenses are recorded and reported only

• A)when they are incurred whether or not cash is paid.
• B)when they are incurred and paid at the same time.
• C)if they are paid before they are incurred.
• D)if they are paid after they are incurred.

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Definitions:

Break-even Point

The point at which total costs and total revenue are equal, meaning no net loss or gain, and the business has "broken even."

Sales Dollars

A term used to represent the total value, in monetary terms, of all sales transactions within a specified period.

Variable Costs

Operating expenses that fluctuate based on business operations.

Zero Profit

A situation where a business or investment generates no profit but also doesn’t incur a loss, essentially breaking even.