The Assumption Which Requires Transactions to Be Recognised in the Accounting

question 53

Multiple Choice

The assumption which requires transactions to be recognised in the accounting reports when they occur and not when the cash is received or paid is:

• A) accrual basis.
• B) accounting entity.
• C) faithful representation.
• D) accounting period.

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Definitions:

Interest Rate

A lender's price to a borrower for the asset's usage, quantified as a percentage of the main sum.

Cash Flows

The movement of funds in and out of a business, determining its operating, investing, and financing activities' liquidity.

Lottery Prize

A financial reward won in a lottery, typically involving a large cash sum or valuable goods.

Monthly Payments

Regular payments made once a month, often used in the context of loans or leases.