Under accrual accounting, revenues and expenses are recognised when
Acash is received or paid
Bthe books are audited
Cthey are earned or incurred
Dthe tax return is filed
Answer & Solution
Correct answer: C. they are earned or incurred
Accrual accounting ties recognition to earning and incurring, not to the movement of cash.
Keep practising Accounting Concepts
Browse all Accounting Concepts questions for CA Foundation, or explore more Accounting topics.
Related questions
Forensic accounting engagements arise fromFinancial statements published after the period ends are mainlyManagement accounting also covers future-oriented items such asWhich audit firm was dissolved after the Enron scandal?The Sarbanes-Oxley Act of 2002 followed the admissions of fraud atPreventing and detecting fraud is primarily the duty ofAn intentional misstatement in accounting records involving deception isWhich accounting field aims to give an independent opinion on financial statements?