The cash bass of accounting requires the recognition of revenue only when they are

Assessment: JAMB UTME - Principles of Accounts - 1994 Subject: Financial Accounting

Question 1 Report

The cash bass of accounting requires the recognition of revenue only when they are
Answer Details
The cash basis of accounting requires the recognition of revenue only when they are received. This means that revenue is recorded only when cash is received from customers, regardless of when the goods or services were sold. This method is often used by small businesses or individuals, as it is simpler to record transactions when cash is physically received. However, it may not give an accurate picture of the company's financial performance, as revenue earned but not yet received is not recorded.
Read lesson note on Nature And Significance Of Accounting (JAMB)
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