Accounting Multiple Choice Question – 2 March 2025

What is the objective of the accruals basis of accounting?

Select ONE answer:

1. To match cash inflows with cash outflows
2. To match expenses with revenue earned
3. To match expenses with cash received in the period
4. To provide financial information to help investors determine the current cash flows

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct == > Expenses are matched with revenue earned under this basis of accounting because transactions and other events are recognised when they occur rather than when the related cash-flow is either paid or received. (A), (C) and (D) all relate in some way to cash flow.
3. Not correct
4. Not correct

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