Accounting · Accounting Concepts and Principles
Which of the following statements correctly describes the 'Accrual Concept' in accounting?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Only revenues are recorded on an accrual basis, while expenses are on a cash basis.
- 2Only expenses are recorded on an accrual basis, while revenues are on a cash basis.
- 3Income and expenses are recorded when they are earned or incurred, regardless of cash flow.✓
- 4Only transactions involving cash flows are recorded.
Correct answer
Income and expenses are recorded when they are earned or incurred, regardless of cash flow.
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