Business FinancesQuestion 290 of 1632
Which accounting method records revenue when it is EARNED and expenses when they are INCURRED, even if no cash has changed hands?
a.Cash basis
b.Job cost basis
c.Accrual basis
d.Break-even basis
Explanation
Accrual-basis accounting matches revenue to the period in which it is earned and expenses to the period in which they are incurred, giving a more accurate picture of profitability than cash basis.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)