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JAMB Principles of Accounts 2005 Question 49

Question 49

Accounting Concepts and Conventions

The accounting method that reports incomes when earned and expenses when incurred is called

  1. A.cash accounting
  2. B.commitment accounting
  3. C.fund accounting
  4. D.accrual accounting
Show the answer and explanation

Answer: D (accrual accounting)

Explanation

Accrual accounting records income when it is earned and expenses when they are incurred, whether or not cash has moved.