Question

Which of the following is true of the cash method of accounting?

A. It's only available to C corporations with sales over $5 million.

B. A sale is entered into the books when the invoice is generated.

C. You pay taxes on revenue before you actually receive it.

D. Recording of income can be put off until the next tax year when the income is actually received.​

Answer 1

Answer: Recording of income can be put off until the next tax year when the income is actually received.

Explanation: took the test

Answer 2

D. Recording of income can be put off until the next tax year when the income is actually received.​

Step-by-step explanation:

The cash accounting system is one of the two accounting in use. The other one being the accrual method.

In cash accounting, revenues and expenses are recognized or recorded only when money changes hands. It means that transactions will be recognized in the period when the money is received or paid. Revenue will be recorded when money is received, and expenses will be recognized when payments are made. Practically, transactions from a previous period can be recognized in the following year when money is received.