Which of the Following Is Not a Characteristic of Accrual

question 151

Multiple Choice

Which of the following is not a characteristic of accrual basis of accounting?

• A) Revenues and expenses are reported in the period in which cash is received or paid
• B) Revenues are reported on the income statement in the period in which they are earned
• C) Accrual basis of accounting supports the matching concept
• D) Expenses are reported in the same period as the revenues to which they relate

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Definitions:

Risk of Loss

The possibility that an asset might be lost, damaged, or diminished in value, often leading to discussions about which party bears this risk in transactions.

UCC Approach

A framework derived from the Uniform Commercial Code, guiding transactions involving personal property, goods, and secured transactions in the United States.

Shipment Contracts

Agreements where the seller is obligated to ship goods but does not need to deliver them to a specific destination, transferring risk to the buyer upon shipment.

Sale of Goods

A commercial transaction where the ownership of physical items is transferred from a seller to a buyer in exchange for payment.