Which of the following statements best describes the difference between the accrual basis of accounting and the cash basis of accounting? A) The cash basis of accounting records revenues when they are earned and expenses when resources are used. B) The cash basis of accounting records revenues when cash is received and expenses when cash is paid out. C) The accrual basis of accounting records revenues when cash is received and expenses when cash is paid out. D The accrual basis of accounting records revenues when they are earned and expenses when they are incurred.
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Accrual basis accounting records revenues when they are earned and expenses when they are incurred, regardless of when cash changes hands. Cash basis accounting records revenues when cash is received and expenses when cash is paid out. Show more…
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