Under both accrual-basis and cash-basis accounting, all revenues and expenses are recorded at the same point in time. True or fa

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STALIN [3.7K]

2 years ago

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Under both accrual-basis and cash-basis accounting, all revenues and expenses are recorded at the same point in time. True or fa

lse?.

Business

1 answer:

Ugo [173] · Answer 1 · 2023-07-21T23:53:22+03:00

It is false that under both accrual-basis and cash-basis accounting, all revenues and expenses are recorded at the same point in time.

<h3>What is accrual-basis accounting?</h3>

In the world of finance, accrual refers to the process of accumulating interest or various investments together over time.
When a transaction is documented as having occurred rather than when a payment is made or received, this accounting method is known as accrual accounting.
According to the matching principle, income and expenses should be recorded in the same period, and this is how the approach operates.

Any income made or expense incurred for which money has not yet been exchanged requires accruals.
By including relevant information regarding recently extended short-term credit to consumers and upcoming liabilities owed to lenders, accruals enhance the quality of the information on financial statements.

Learn more about accrual accounting here:

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