What Is the Difference Between the Accrual Basis and the Cash

question 17

Multiple Choice

What is the difference between the accrual basis and the cash basis of accounting?

• A)Accrual basis records revenue when cash is received and cash basis matches expenses with the revenues it generates.
• B)Accrual basis records revenue when cash is received and the cash basis records revenue when it is earned.
• C)Accrual basis matches expenses with the revenues it generates and cash basis records revenue when cash is received.
• D)Accrual basis records expenses when cash is paid and cash basis records expenses in the accounting period,it is incurred.

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Definitions:

Financial Information

Data regarding monetary transactions, assets, liabilities, revenues, and expenses, crucial for decision-making in businesses and personal finance.

Bargaining Proposals

Suggestions or ideas put forward by either side in a collective bargaining negotiation aimed at reaching a mutual agreement.

Pay Increase

An upward adjustment in wages or salary granted to an employee based on performance, labor market conditions, or negotiations.

Competitive Disadvantage

A condition where a company or country is not as well-positioned as its competitors to compete effectively in the market, often due to inferior resources, capabilities, or strategies.