GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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On confirmation of orders but before the delivery of goods take place
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On the basis of actual receipt and payment of cash
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As and when they occur
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All of the above
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Detailed explanation-1: -The concept in accrual basis of accounting is that accounting transactions should be recorded in the accounting periods when they actually occur i.e. when the transactions occur, rather than in the periods when there are cash flows associated with them.
Detailed explanation-2: -Accrual basis of accounting is also known as Mercantile basis of accounting. In this system, transactions are recorded when they arise. The incomes are recorded in the books of the accounts when it is earned, irrespective of the fact that it is received or accrued.
Detailed explanation-3: -Accrual Basis of Accounting This is the basis of accounting in which transactions are recognized in the fiscal year they occur, regardless of when cash is received or disbursed. Revenue is recognized in the fiscal year earned, and expenses are recognized when incurred.
Detailed explanation-4: -The accrual basis of accounting affects the income statement and the balance sheet. In the income statement, expenses are recorded as incurred whether paid or not and incomes are recorded as earned whether received or not.
Detailed explanation-5: -Using accrual accounting, expenses are recorded and reported only:-when they are incurred and paid at the same time.