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The cash basis of accounting records revenues and expenses when the cash is exchanged, while the accrual basis of accounting a.records revenues and expenses when the company needs to apply for a loan b.records revenues when cash is received and expenses when they are incurred c.records revenues when they are earned and expenses when they are paid d.records revenues and expenses when they are incurred

Respuesta :

Answer:

The correct answer is letter "D": records revenues and expenses when they are incurred.

Explanation:

In the accrual method of accounting, the revenue and expenses are recorded when it is earned. The advantage of using the accrual method is that this approach includes accounts receivables and payables, which gives a better image of the profitability of the firm in the long run.

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