Property Management
A Texas property manager uses the accrual accounting method. Under this method:
ARevenue is recorded only when cash is received
BRevenue is recorded when earned and expenses are recorded when incurred, regardless of when cash changes hands✓ Correct
CAll income and expenses are recorded at year-end only
DRevenue is recorded when the lease is signed
Explanation
Accrual accounting records revenue when earned (when rent is due) and expenses when incurred, not when cash is exchanged. This provides a more accurate picture of financial performance than cash-basis accounting.
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