4 Questions
What is the primary difference between cash and accrual basis of accounting?
The time frame in which revenues and expenses are reported
Which basis of accounting records revenue when cash is received and recognizes expenses when they are paid?
Cash basis of accounting
Which basis of accounting depicts the real performance and financial position of the enterprise for a specific period?
Accrual basis of accounting
Why is the accrual basis of accounting the most commonly used practice by businesses?
It reflects the real performance and financial position of the enterprise
Test your knowledge on the differences between cash and accrual basis accounting. This quiz will assess your understanding of when each method is used and how revenues and expenses are reported.
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