Question

In cash system of accounting, entries are recorded ____________.

• A. when income is earned by a business or expenditure is incurred by it
• B. on the basis of actual receipt of cash or actual payment of cash
• C. when order for goods to be purchased in placed and order for goods to be sold is received
• D. All of the above

Answer 1

Answer: (B)

on the basis of actual receipt of cash or actual payment of cash

cash system of accounting, transaction is recorded when cash is received or paid.