An Expense Is Recorded Under the Cash Basis Only When

question 183

Multiple Choice

An expense is recorded under the cash basis only when

• A) services are performed.
• B) it is earned.
• C) cash is paid.
• D) it is incurred.

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Definitions:

Account Receivable

Account receivable is the money owed to a business by its customers for goods or services delivered but not yet paid for.

Bad Debts Expense

The cost reported by a company due to the unrecoverable credit it extended to its customers, representing expected losses from unpaid financial obligations.

Notes Receivable Account

An account on the balance sheet representing claims for payments from customers or other parties due within a year or more.