The Method of Accounting That Records Revenues When the Cash

question 107

Multiple Choice

The method of accounting that records revenues when the cash is received and expenses as they are paid is the:

• A) deferral method.
• B) cash method.
• C) accrual method.
• D) hybrid method.

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Definitions:

Intangible Assets

Non-physical assets that have value, such as patents, trademarks, and copyrights, known for their long-term benefits to a company.

Gain on Sale

The profit recognized when an asset is sold for more than its carrying amount.

Other Revenue

Income that a business earns from activities not related to its primary operations, such as investment income or rental income.

Fixed Assets

Long-term tangible assets that are used in the operations of a business and are not expected to be consumed or converted into cash in the short term, such as property, plant, and equipment.