Question

If revenues are recognized only when a customer pays, what method of accounting is being used?Recognition basisAccrual-basisMatching basisCash-basisPeriodicity

Answer 1

Answer:

The correct answer here is Cash basis.

Explanation:

One of the methods of recording accounting transactions for income and expenses is cash basis accounting , where the transactions are only recorded when income is received in cash or expenses are paid in cash. This accounting method is not accepted by GAAP (Generally accepted accounting principle ) and IFRS ( International financial reporting standards ) because this method violates the income ( revenue ) and expense recognition principle.