Question

In accrual system of accounting _________.

• A. revenues are taken care of irrespective whether cash in received on not
• B. cost incurred during the period is taken care of
• C. cost of last financial period is only taken care of
• D. Both A and B

Answer 1

The correct option is D Both A and B

There are two system of accounting. Accrual system and cash system of accounting.

Accrual system of accounting defines that revenues and cost are recorded in the books of account on the basis of their occurrence. Accrual concept says that income and expense to recorded within the financial year for which these pertain to irrespective of cash is received or paid against the transaction.