Using accrual accounting, expenses are recorded and reported only

A) when they are incurred for the purpose of generating revenue, whether or not cash is paid.
B) when they are incurred and paid at the same time.
C) if they are paid before they are incurred.
D) if they are paid after they are incurred.

Accrual Accounting

A rephrased definition of Accrual Basis of Accounting; it involves recording transactions when they are earned or incurred, providing a more accurate financial picture by matching revenues with expenses.

Expenses

Expenses are the costs incurred during the operation of a business, such as rent, salaries, utilities, and materials, which are subtracted from revenues to determine net income.

Generating Revenue

Generating revenue involves activities and strategies a business employs to sell goods and services to customers, resulting in earnings.