A system of accounting in which revenues are recognised when earned and expenses are recognised when incurred, even in the absence of cash flows, is known as __________. Select one alternative: creative accounting pre-tax accounting accrual accounting None of the given answers are correct
A system of accounting in which revenues are recognised when earned and expenses are recognised when incurred, even in the absence of cash flows, is known as __________. Select one alternative: creative accounting pre-tax accounting accrual accounting None of the given answers are correct
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
A system of accounting in which revenues are recognised when earned and expenses are recognised when incurred, even in the absence of
Select one alternative:
- creative accounting
- pre-tax accounting
- accrual accounting
- None of the given answers are correct
Expert Solution
Step 1 : Definition
- Accrual system of accounting is the one in which expenses are recorded as and when they are incurred and incomes are recorded as and when they are earned , not when they are actually paid / received .
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