Question

Which of the following statements is true for cash basis accounting?

Q: Answer-Which of the following statements is true for cash basis accounting?

The correct answer is D. In cash basis accounting, revenue is recognized only when cash is received and expenses are recognized only when cash is paid. Therefore, revenue is not recognized when earned and expenses are not recognized when incurred.

A Revenue is recognized when earned

B Expenses are recognized when incurred

C Both A and B

D None of the above

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Which of the following statements is true for cash basis accounting?

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