If a company uses accrual-basis accounting O transactions are recorded in the period they occur rather than in the period in which cash is paid or received. O net income is calculated by matching cash outflows against cash inflows. O cash must be received before revenue is recognized. O the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles.
If a company uses accrual-basis accounting O transactions are recorded in the period they occur rather than in the period in which cash is paid or received. O net income is calculated by matching cash outflows against cash inflows. O cash must be received before revenue is recognized. O the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles.
Chapter4: The Adjustment Process
Section: Chapter Questions
Problem 3MC: Revenues and expenses must be recorded in the accounting period in which they were earned or...
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