Which of the Following Expressions Correctly Describes When Revenues and Expenses

question 16

Multiple Choice

Which of the following expressions correctly describes when revenues and expenses are recognized under accrual basis accounting?

• A) Revenues when cash is received; expenses when cash is paid
• B) Revenues when cash is received; expenses when the expense is incurred
• C) Revenues when the revenue is earned; expenses when the expense is incurred
• D) Revenues when the revenue is earned; expenses when cash is paid

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Definitions:

Ethanol

A volatile, flammable, colorless liquid alcohol, commonly used as a solvent, in medical applications, and as a recreational beverage.

Carbon Compounds

Organic molecules that contain carbon atoms bonded to hydrogen, oxygen, nitrogen, or other elements.

3-Phenylpentan-3-ol

An organic compound characterized by a five-carbon chain with a phenyl group attached to the third carbon and an alcohol group on the same carbon.

Benzoic Acid

A simple aromatic carboxylic acid, its salts are used as food preservatives.