The economic event that creates the financial transaction

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Reference no: EM13914020

Which of the following is a FALSE statement regarding accrual accounting?

a. The revenue recognition principle requires the revenue to be recognized in the period when they are realized and earned. This is the period in which the service is rendered.

b. An advantage is that there are no complex accounting rules and it is closely aligned to accounting for tax purposes

c. The economic event that creates the financial transaction, rather than the transaction itself, provides the basis for the accounting entry.

d. Implementation of the matching principle dealing with expenses creates a problem with long-lived assets such as buildings and equipment.

Reference no: EM13914020

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