Question

Income and Expenditure Account is prepared on ____________.

• A. Cash basis
• B. Accrual basis
• C. Hybrid basis
• D. Either (A) or (B)

Answer 1

The correct option is B Accrual basis

Income and expenditure account is prepared on Accrual basis. Accrual basis of accounting is wherein all the expenses that are actually incurred and incomes actually earned are recorded. Its recorded when its realised and not when received.