Which statement best describes the difference between cash basis and accrual basis accounting?

• A. Accrual basis recognizes revenues and expenses when they are incurred, regardless of cash flow.
• B. Cash basis recognizes revenues and expenses only when they are incurred.
• C. Accrual basis recognizes revenues and expenses only when cash is received or paid.
• D. Cash basis recognizes revenues and expenses when they are incurred, regardless of cash flow.

Answer: (A)