Which of the Following Statements Are Correct

question 135

Multiple Choice

Which of the following statements are correct?
For accrual-basis accounting:
(1) record revenues when earned
(2) record expenses when cash is paid For cash-basis accounting:
(3) record revenue when cash is received
(4) record expenses when benefit is received

• A)(1)and (4)
• B)(2)and (3)
• C)(1)and (3)
• D)(2)and (4)

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Definitions:

Usage of Trade

A common practice or method of dealing recognized and accepted in a particular industry or trade.

Usage of Trade

Customary practices and standards within a particular industry or market that are considered legally binding in commercial transactions.

Exclusive Remedy

A sole solution or legal recourse available to a party under a contract in the event of a breach, often limiting other forms of legal action.

Remedies Agreed Upon

Refers to solutions or compensations for breach of contract that both parties have consented to in advance.