Question

Which of the following is false?

Group of answer choices

Every adjusting entry will include one income statement account and one balance sheet account.

Under accrual basis accounting, companies record revenues when they receive cash and record expenses when they pay cash.

There are two types of adjusting entries: deferrals and accruals.

Accrued revenue is revenue that has been earned but not yet received in cash or recorded.

Answer 1

--Correct Answer = Option #2 "Under accrual basis accounting, companies record revenues when they receive cash and record expenses when they pay cash" is a FALSE statement.

--This happens under 'Cash basis' when companies record revenues when they receive cash and record expenses when they pay cash.

--Under 'accrual basis', companies record revenues when these are 'earned' and record expenses when these are 'incurred' whether cash has been received or paid or not.