Which of the following statements reflects an accurate comparison of cash-basis versus accrual-basis accounting? The difference between cash-basis and accrual-basis accounting is a matter of timing. The matching principle applies, regardless of whether cash-basis or accrual-basis accounting is used. IFRS and ASPE both allow for use of either cash-basis or accrual-basis accounting. Net income will be the same regardless of whether cash-basis or accrual-basis accounting is used.

Which of the following statements reflects an accurate comparison of cash-basis versus accrual-basis accounting? The difference between cash-basis and accrual-basis accounting is a matter of timing. The matching principle applies, regardless of whether cash-basis or accrual-basis accounting is used. IFRS and ASPE both allow for use of either cash-basis or accrual-basis accounting. Net income will be the same regardless of whether cash-basis or accrual-basis accounting is used.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

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...

See similar textbooks

Similar questions

Which of the following is not a criterion to recognize revenue under GAAP? A. The earnings process must be completed. B. A product or service must be provided. C. Cash must be collected. D. GAAP requires that the accrual basis accounting principle be used in the revenue recognition process.
Revenues and expenses must be recorded in the accounting period in which they were earned or incurred, no matter when cash receipts or outlays occur under which of the following accounting methods? A. accrual basis accounting B. cash basis accounting C. tax basis accounting D. revenue basis accounting
What are the differences between cash and accrual basis accounting? Provide an example of each
When opposed to cash-basis accounting, does accrual-basis accounting offer more meaningful information? If not, why not? Give an example to support your argument.
Which of the following is not a criterion to recognize revenue under GAAP? GAAP requires that the accrual basis accounting principle be used in the revenue recognition process. The earnings process must be completed. A product or service must be provided. Cash must be collected O O O O
Which method of accounting (cash or accrual basis) is consistent with Generally Accepted Accounting Principles?
Under accrual accounting, revenue should be recognized and recorded on the income statement: Select one: O When cash is received O When earned
What is the purpose of adjusting entries as they relate to the difference between cash accrual accounting?
Define accrual basis accounting and contrast it with cashbasis accounting.
Which of the following statements is correct? Options: • The net income would still be the same regardless of accounting method that is used whether cash basis or accrual basis • Pre-collections initially recorded as income will overstate the profit at the end of the accounting period if no adjustment is done for unearned portion • Deferral is intended to recognize income earned but not yet received • Accrual of expenses will increase the expense element and will correspondingly decrease the liability
What is false about the matching principle? a. Incurred expenses should be matched with earned revenues. b. It supports accrual accounting principles. Matches assets with liabilities d. It is in accordance with the Internatidwal Financial Reporting Standards.
The expense recognition principle (“matching”) controlsa. Where on the income statement expenses should bepresented.b. When revenues are recognized on the incomestatement.c. The ordering of current assets and current liabilities onthe balance sheet.d. When costs are recognized as expenses on the incomestatement.