Question

A company may recognize a revenue or expense without a corresponding cash collection or payment in the same accounting period. True/False

Answer 1

True

Step-by-step explanation:

A company may recognize a revenue or expense without a corresponding cash collection or payment in the same accounting period, by using the following method:

Accrual-Basis Accounting

Revenues are recognized when services performed, even if cash was not received. Expenses are recognized when incurred, even if cash was not paid.