Multiple choice

When cash is received, entries are made in the accounts books. This basis of accounting is termed as

  1. accrual basis

  2. cash basis

  3. Both 1 and 2

  4. None of these

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Cash basis accounting is a method where transactions are recorded only when cash is actually received or paid. This is in contrast to the accrual basis, which records transactions when they occur, regardless of cash flow.

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