CIMA BA3 · Chapter 2 · Question 4 of 8
Under the accruals basis of accounting, transactions are recognised:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) In the periods in which they occur, even if the related cash is received or paid in a different period
Explanation
Accrual accounting records the effects of transactions and other events in the periods in which they occur, not when the cash is received or paid. This is why accruals, prepayments, receivables and payables are recognised at the period end.
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