Using Accrual Accounting, Expenses Are Recorded and Reported Only

question 38

Multiple Choice

Using accrual accounting, expenses are recorded and reported only

• A)when they are incurred for the purpose of generating revenue, 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.

---

Definitions:

Customer Loyalty

The likelihood of repeated business from a customer demonstrated by their repeat purchases or preference for a business's product or service over competitors.

Sustainable Operating Profits

Profits from core business operations that are expected to continue or be maintained without significant new investment or changes in the business environment.

Nonrecurring Items

Financial events that are not expected to happen regularly in a company's business cycle, affecting the company's usual revenue or expenses.