The _______________ Requires That Revenue Is Recorded When It Is

question 58

Multiple Choice

The _______________ requires that revenue is recorded when it is received in cash and expenses are recorded when they are paid in cash.

• A) accrual basis of accounting
• B) cash basis of accounting
• C) hybrid basis of accounting
• D) GAAP basis of accounting

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Definitions:

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and loan payments.

Variable Costs

Costs that change in relation to the level of goods or services produced, such as materials and labor, in contrast to fixed costs.

Total Revenue

The total income generated from the sale of goods or services before any expenses are subtracted.

Variable Costs

Expenses that change in proportion to the activity of a business, such as costs for raw materials and labor.