There Are Two Types of Accounting Methods, Cash and Accrual

question 39

Short Answer

There are two types of accounting methods, cash and accrual. Review the two examples, and identify the accounting method.
1. If revenues are recognized and recorded when earned, the company is using the __________ basis of accounting.
2. If a business records expenses when paid, the company is using the __________ basis of accounting

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Definitions:

Required by Law

Obligations that individuals or entities must comply with, as mandated by legislation or legal statutes.

Temporary

Relating to a limited period of time; not permanent.

Voluntary

Performed, carried out, or done by one's own choice or consent; acting or done willingly and without constraint or expectation of reward.

Establishing Autonomy

The process of gaining independence and self-determination in one's actions and decisions.