easy · Financial Accounting accounting-cycle-financial-statements

Which of these is a key difference between the 'Cash Basis' and the 'Accrual Basis' regarding expenses?

1. Accrual basis records expenses when they are incurred; cash basis records them when the money is paid.
2. Cash basis accounting essentially ignores the timing of when the actual cash flows occur.
3. Cash basis accounting is required for all public companies, while the accrual basis remains optional.
4. Accrual basis accounting only recognizes expenses that involve receiving a physical, tangible product or good.

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