Question

Accruals occur when cash flows:(A) Are uncertain.
(B) May be substituted for goods or services.
(C) Occur after revenue or expense recognition. Correct
(D) Occur before expense recognition.

Answer 1

Answer: Option C

     

Explanation:

For accounting, accrual of something is the accumulation over a duration of time of benefit or specific investments. It has different accounts meanings in which it can apply to accounts on a financial statements that reflect obligations and non-cash assets used in accrual accounting.

Examples of typically accrued expenses include: loan interest that have not yet obtained a creditor invoice. Hence from the above we can conclude that the correct option is C.