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A small firm records nothing until money actually changes hands. That method is:
ACard basis
BCash basis
CCase basis
DCost basis
Answer & Solution
Correct answer: B. Cash basis
1. No entry is made when a service is performed on credit.
2. The exchange of cash is what triggers the record.
3. That method is cash basis accounting.
_Source: OpenStax Principles of Financial Accounting, Chapter 4, The Adjustment Process._
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