Cash vs Accrual Accounting

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson
Download our mobile app to listen on the go
Get App

Questions and Answers

What is the primary difference between cash and accrual basis of accounting?

  • The method of recording revenues and expenses
  • The time frame in which revenues and expenses are reported (correct)
  • The use of Generally Accepted Accounting Principles (GAAP)
  • The complexity of the transactions

Which basis of accounting records revenue when cash is received and recognizes expenses when they are paid?

  • Cash basis of accounting (correct)
  • Accrual basis of accounting
  • Single-entry accounting system
  • Both cash and accrual basis of accounting

Which basis of accounting depicts the real performance and financial position of the enterprise for a specific period?

  • Cash basis of accounting
  • Accrual basis of accounting (correct)
  • Single-entry accounting system
  • Both cash and accrual basis of accounting

Why is the accrual basis of accounting the most commonly used practice by businesses?

<p>It reflects the real performance and financial position of the enterprise (B)</p> Signup and view all the answers

Flashcards are hidden until you start studying

More Like This

Use Quizgecko on...
Browser
Browser