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Question
Manufacturing a/c is prepared on ________ basis.
Manufacturing a/c is prepared on ________ basis.
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Solution
The correct option is A Accrual
The term "accrual" refers to any individual entry recording revenue or expense in the absence of cash transaction. Under the accrual basis of accounting, expenses are matched with the related revenues and/or are reported when the expense occurs, not when the cash is paid. The result of accrual accounting is an income statement that better measures the profitability of a company during a specific time period. Hence, Manufacturing a/c is prepared on accrual basis.
The term "accrual" refers to any individual entry recording revenue or expense in the absence of cash transaction. Under the accrual basis of accounting, expenses are matched with the related revenues and/or are reported when the expense occurs, not when the cash is paid. The result of accrual accounting is an income statement that better measures the profitability of a company during a specific time period. Hence, Manufacturing a/c is prepared on accrual basis.
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