Question

Using accrual accounting, revenue is recorded and reported only
a-True
b-False

Answer 1

Using accrual accounting, revenue is recorded when earned, not when cash is received, which is true. This method matches revenue with expenses when they occur, for a clearer financial picture.

Step-by-step explanation:

Using accrual accounting, revenue is recorded and reported only when it is earned, regardless of when the cash is actually received. This statement is true. Accrual accounting is a method where revenue and expenses are recorded in the period they occur, even if the cash has not been exchanged. This approach is based on the matching principle, which matches revenue with the expenses incurred to generate that revenue, providing a more accurate picture of a company's financial position.