Discuss Worldatwork T7 Exam Topic 1 Question 41

Which of the following is true of accrual accounting?

ANeither the recognition of revenue nor the recording of expense necessarily involves the receipt or payment of cash

BIt rests on a primary guiding principle, which is recognition

CThe recognition of revenue involves the receipt or payment of cash, while the recording of expense does not

DIt entails recording income or expenditure only when money comes into or leaves the company

Suggested Answer: A

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12 comments · newest first

Antione 12 months ago

D is wrong! Accrual accounting is about more than just cash transactions.

Nidia 12 months ago

B is misleading. Recognition is important, but A is the key point here.

Charlene 1 year ago

Wait, so you're saying cash flow isn't always involved? That sounds odd.

Paris 1 year ago

Totally agree with A! Accrual accounting is all about timing.

Hyman 1 year ago

A is definitely true! Cash doesn't always dictate revenue or expenses.

Scarlet 1 year ago

Option D seems wrong to me. I recall that accrual accounting records transactions regardless of cash flow, so it can't just be about when money comes in or out.

Ernest 1 year ago

I feel like option C is misleading. I thought both revenue and expenses could be recognized without cash transactions in accrual accounting.

Vincent 1 year ago

I'm not entirely sure, but I remember something about the guiding principles of accrual accounting. Was it recognition or matching? Maybe option B is correct?

Pete 1 year ago

I think option A sounds right because accrual accounting is all about recognizing revenues and expenses when they occur, not just when cash changes hands.

Madelyn 1 year ago

Hmm, I'm a bit unsure about this one. I know we covered NumberFormat in class, but I can't quite remember the specific method to use for currency formatting.

Erasmo 1 year ago

Reviewing the Author instance logs is a good idea. If there are any template errors, that could be the source of the inconsistent content.

Lashaun 1 year ago

I think I've got a good handle on this. The key is to focus on the specific details about realms and interfaces.

Worldatwork T7 Exam - Topic 1 Question 41 Discussion