Cash-based accounting differs from accrual accounting because cash accounting recognises transactions primarily:

Type: MCQ • Marks: 1

A. When economic resources are earned or obligations arise

B. Only at the end of the financial year

C. Only after external audit

D. When cash is received or paid

Explanation

Accrual accounting recognises revenues and expenses when they are earned or incurred, while cash accounting focuses on actual cash flows.

UPSC Principal & Vice Principal Management Finance Administration

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