Answer:
Accrual basis accounting
Explanation:
Under Accrual basis of accounting, income is recognized when it is earned and not when actual cash is paid or received.
Under cash basis of accounting, income is only recognized when actual cash is received.
Accrual basis of accounting ensures transactions pertaining to a period are recorded in that period and it depicts more accurate financial picture unlike in cash accounting wherein income for a period might be overstated or understated.
Following cash basis of accounting is not in accord with both US GAAPs (generally accepted accounting principles) and IFRS.
Answer:
it is b
Explanation:
because a net worth of a company will mot affect
Answer:
I’m not sure what you mean but sleeping on a case is bad because when revealing the problem might be handle to late
Explanation:
Answer:
a) the liability recorded when cash was received is decreased by the adjustment for the revenue being earned
Explanation:
When cash is received for revenue yet to be earned, it is called deferred revenue. The entries posted at this point is a Debit to Cash (an increase in cash balance) and a Credit to Deferred revenue (a liability account). When the revenue gets earned, it get recognized with a Debit to Deferred revenue (to reduce the liability as the obligation has been fulfilled resulting in revenue being earned) and a Credit to Revenue (P/L).
Hence, the right option is a) the liability recorded when cash was received is decreased by the adjustment for the revenue being earned.
