Question

Accounting for expenses on the cash basis generally means that expenses are entered in the accounts even though they may have been charged and not paid for in cash.

a) True
b) False

Answer 1

False. Expenses on the cash basis of accounting are not entered in the accounts when they are charged and not paid for in cash.

Step-by-step explanation:

False

Accounting for expenses on the cash basis does not mean that expenses are entered in the accounts when they are charged and not paid for in cash. In fact, the cash basis of accounting typically records expenses only when they are actually paid in cash. This method focuses on the actual inflows and outflows of cash, rather than when expenses are charged.

For example, let's say a business receives an invoice for office supplies but has not yet paid the supplier. On the cash basis of accounting, this expense would not be recorded until the business actually makes the payment.