C. A good or service is paid for.
Under a cash accounting system, an expense is recognized when a good or service is paid for. This means that the transaction is recorded when the cash is actually paid or received, rather than when the order is placed, when the good or service is delivered, or when it is used or sold. This method of accounting is common for small businesses or individuals who do not have complex financial transactions and want a simple way to keep track of their income and expenses.