Which of the Following Statements About Cash Basis Accounting and Accrual

question 82

Multiple Choice

Which of the following statements about cash basis accounting and accrual basis accounting is correct?

• A)Using the accrual basis of accounting,if payment is received before delivery of goods or a service,revenue is recorded at the time the payment is received.
• B)Using the accrual basis of accounting,if payment is received after delivery of goods or a service,an asset is recorded at the time the good or service was delivered.
• C)Using the cash basis of accounting,if payment is received before delivery of goods or a service,net income is affected when goods or services are delivered.
• D)Using the cash basis,if payment is received after delivery of goods or a service,deferred revenue is recorded.

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Definitions:

Total Float

The total amount of time that a project task can be delayed without causing a delay to the project's completion date.

Cheque Clear

The process by which a cheque's funds move from the issuer's account to the recipient's account, and the cheque is deemed successfully processed.

Banking System

A network of financial institutions, including banks, that provide financial services to the public and businesses.

Availability Float

The time difference between when a deposit is made in a bank account and when the amount becomes available for use.