Which of the following statements regarding accrual accounting
is correct? If a business uses accrual accounting, the business
does not save receipts until payments are actually received. If a
company uses accrual accounting, the company must record
expenses over the same period as the income they generate. IFRS
does not allow accrual accounting for the external reporting of
Income. Items presented in the income statement continue to have
impact beyond the current period, while deferred items
the balance sheet only impacts the current period.
Answer 1
Solution: If a business uses accrual accounting, the
the company must record expenses in the same period as income
they generate
Explanation: Under the accrual method of accounting for expenses
paid are matched with the related income and subsequently declared
when the expense actually occurs, not when the cash amount
it is paid